Question

The following is the trial balance of PARKSON SDN BHD on December

Particulars
Cash in Hand
Cash at bank
Purchase and sales
Returns
Wages

Power and Fuel

Carriage Inward
Carri age Outward
Stock

3l't

Debit-RM

Credit-RM

540
12,630
140 ,67 5

2,680
20,480

258,7 80
1,500

4,7 30

3.200
2,040
25,7 60

Factory Building
Freehold Land
Plant & Machinery
Patents& trade Mark

20,000
20,000

0,000

,500

Sal ary

15,000

General expenses
lnsurance Premium
Capital
Debtors
Creditors

Drawings

15,245

Total

2011

3,000
600
82,000

4,5 00
6,3 00

348,580

348,580

Required

a)

Taking into account the following adjustments; Prepare a Trading and Profit & Loss
Account and Balance Sheet.
i. Closing Stock is valued at RM 26,800
ii. Machinery to be depreciated at the rate of 10Yo and patent at the rate of 20o/o
iii. Salary for the month of December 2011 amounting to RM 1,500 was unpaid.
iv. Insurance including a premium of RM 170 for the period January 2012.
v. Wages Include a sum of RM 2.000 spend on the erection of cycle stand in the building.
vi. A provision tbr bad debts is to be created to the extent of 5% on sundry debtors.
(16 marks)

b)

What do you understand by the concept" Cash to Cash Cycle" diagrammatically. Explain
(9 marks)
with example.
(Total: 25 marks)

Questio n 2

Following is the Balance Sheet of Weldon BHD as on 31 .12.2011.

Liabilities
Equity Share Capital
General Reserve
12% Debenture
Cred itors
Outstanding Expenses

Assets

3,000,000
5 00,000
2,000,000
950,000
250,000

Land

Building
Plant & Machinery
Furniture
Debtors
stock
cash

Prepaid expenses

Total

6,7 00,000

Total

500,000
3 00,000
1,500,000

400,000
2,000,000
1,500,000

400,000
100,000

6,700,000

Required

a)

b)

You are required to calculate and comment on the ratios.

i. Current Ratio
ii. Debt Equity Ratio
iii. Capital Gearing Ratio
iv. Liquid Ratio

(4 marks)
(4 marks)
(4 marks)
(4 marks)

Explain the term EOQ with Suitable examples and critically evaluate its importance in
present Economic scenario
( 9 marks)

(Total:25 marks)

Question 3

Voltar Company manufactures

a telephone

answering machine. The company's

contribution format income statement for the most recent year is given below
Sales (20,000 unit)
Less: variable cost

Contribution margin
Less fixed cost
Net operation Income

a)

and

Total
RM r,200,000
RM 900,000
RM 300,000
RM 240,000
RM 60,000

sells

Per unit
RM 60

Percentage

100%

RM 45

RM

15

Management is anxious to improve the company profit performance and has asked for an
analysis of number of items.

i.
ii.
iii.
iv.

To compute the companies PV ratio and Variable expenses

To compute the companies breakeven point in value and

ratio

units

(4 marks)
(4 marks)

Assume that sales increase by rm 400,000 next year. If the cost behavior pattern remain
unchanged by how much will company net operation income increase. Hint: Use CM
ratio to determine your answer.
(4 marks)

Refer to the original data. Next year management wants to earn a minimum profit of
RM 90,000. How many units will have to be sold meeting the target profit figure.
(4 marks)

b)

Provide comments on the following strategies which are being practiced by businesses
today
i.

ii.

iii.

TQM
Katzen
Bench Marking

(3 marks)
(3 marks)
(3 marks)
(Total: 25 marks)

Question 4
A.Charter sports equipments manufacturing A B and C grade Trampolines.
Data of sales and expenses are shown below;

Total

A grade

1,000,000

140,000

Less: Variable expenses

410,000

Contribution Margin

Sales

B Grade

C grade

00,000

360,000

60,000

200,000

150,000

90,000

80,000

00,000

210,000

216,000

4l ,000

10,000

65,000

95,000

20,000

40,000

35,000

19,000

6,000

7,000

6,000

200,000

28,000

100,000

72,000

0,000

95,000

257,000

17

Less fixed expenses

A.
B.

Advertisement Traceable
Depreciation In special equipments

C. Line supervisor salary

D.

General Factory Overhead *

Total fixed expenses

53

Net Operating Income

60,000

* Common fixed cost are allocated

5,000)

43,000

8,000

32,000

on the basis of sales RM

Management is concern about the continues loss shown by A grade Trampoline and wants a
recommendation as to whether or not the line should be discontinued. The special equipments
used to produce the Grade A trampoline has no resale value. If the line grade A line is
discontinued the two line supervisor assigned to the model can be dropped .

Required
a)

i)

Should production and sale of the grade A be discontinued? You may assume that the
company has no other use for the capacity now being used to produce the grade A
Trampoline. Show computation in support of your
(8 marks)

answer.

ii)

Recast the above data in a format that would be more usable to the management in assessing
the long run profitability of the various
(8 marks)

b)

Critically evaluate using the NPV and IRR methods for capital budgeting. Do use suitable
examples for your
(9 marks)

model

answer.

(Total:25 marks)

Question 5
a)

Define and contrast the term working capital and networking

b) What advantages and disadvantages are generally associated

capital

(5 marks)

with use of short term debts?

(5 marks)

c) Critically evaluate the relevance

the errors in trial

balance

of trial balance and its Limitation briefly mentioning about

(5 marks)

d) What do you

understand by Accounting Equation? Briefly explain the significance of

Accounting Equation in recoding the transaction.
(5 marks)

e)

Illustrate the difference between Balance sheet & Trial

Balance

(5 marks)

(Total:25 marks)

Question 6

A trial balance of Sun shine Enterprises

as at December 31 201

is shown below

Sunshine Enterprise - Trial Balance as on December 31, 2011

Account

Debit( RM)

Cash

12.7 00

Debtors
Inventories

18,800
45,000

Land
Building
Accumu lated DepIec iation
Equipments
Accumulated Depreciation
Bank Loan
Creditors
Caprtal sunshine
Drawing Sun shine

46,000
98,500
B ui ldin g

27 ,000

4I

,7

50

- Equipments

21,200
10,000

34,500
r33,900
5,000

Sales

452,05 0

Purchases

354,400

Carri age Inward

Sales discount
Salary Expenses

550

30s0
34,900

utilities

9,7 00

Petro I Expenses

2.950
3.600

Expenses
Repair Expenses

Insurance Expenses

1,7 50

Total

Additional information

1.
2.
3.
4.
5.
6.
7.

679,650

678,650

Depreciation of Building and Equipments are RM 5,000 and RM 4,500 respectively.

Closing inventory as at December 31 201 I is RM44,450
lnterest on bank loan of RM 200 which is due in December 31 2011 is not paid.
Unpaid salary for the month of December is RM 5,500
Prepaid insurance is RM1000
Accrued utilities Expenses as on December 31 is RM2,700
5% of the debt is assumed uncollectable.

Continued

o..

You are required to:

a)

i.
ii.
b)

Prepare an Income Statement for the year end December 31

Balance Sheet as on December 3l,20lI

20ll.
(16 marks)

"The importance pulpose of preparing a cash budget is to determine the total cash owned
by the company in the bank at the end of accounting period" Do you agree with this view.
Explain
(9 marks)

(Total: 25 marks)

Question 7
The information below relates to Lucy Ltd for the first quarter of 201 1 .
Date
Jan 1 to 31

ljnit

Cost per unit

2,000

20

Feb I to 28
2,500
March I to 31
1,600
No beginning inventory

22

production
I s00
2,500

T2

1,200

Purchase

Required

a)

Using periodic inventory system calculate value of ending inventory on march

according to following methods

i.
ii.
b)

FIFO Method
Weighted Average Method

3l,20Ll

(8 marks)
(8 marks)

Critically evaluate the factor to be considered by Finance Manager while designing and
management of capital Structure issues.
(9 marks)
(Total:25 marks)

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