CONFIDENTIAL 1 AC/OCT 2018/FAR160
UNIVERSITI TEKNOLOGI MARA
COMMON TEST 1
COURSE : FINANCIAL ACCOUNTING 2
COURSE CODE : FAR160
EXAMINATION : OCTOBER 2018
TIME : 1 HOUR 30 MINUTES
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of TWO (2) questions.
2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.
3. Do not bring any material into the examination room unless permission is given by the invigilator.
4. Please check to make sure that this test pack consists of :
i) the Question Paper
ii) an Answer Booklet – provided by the Faculty
5. Answer ALL questions in English. (All figures must be calculated to the nearest RM)
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
This examination paper consists of 4 printed pages
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CONFIDENTIAL 2 AC/OCT 2018/FAR160
QUESTION 1
A. Section 26 of the Partnership Act 1961, provides the key principles to be applied in
determining the accounting procedures relating to a partnership. This section will
apply in the absence of any agreement either expressed or implied between the
partners.
State any THREE (3) items apply in section 26 Partnership Act 1961 in the absence
of Partnership agreement.
(3 marks)
B. Simon, Sam and Dam were partners in Samudera Enterprise sharing profit and
losses equally. The partnership charge interest on drawings at the rate of 6% per
annum and no interest on capital. The capital and current statement balances for the
partners as at 31 December 2016 were as follows:
Capital Current
RM RM
Simon 20,000 (4,000)
Sam 20,000 2,000
Dam 20,000 3,000
During the year 2017, the following transactions took place:
1. Sam retired from the partnership on 1 May 2017. On that day, the assets’ value
were as below:
Carrying value New value
RM RM
Plant and Machinery 40,000 74,000
Fixtures and fittings 8,000 2,000
Inventories 14,000 11,800
2. Goodwill was valued at RM30,000. The goodwill account will not be maintained
in the partnership books.
3. The amount due to Sam totaling RM20,000 will be considered as loan to the
partnership. The remaining balance is paid to Sam by cash.
4. A new partnership agreement was drawn up which stated that:
i. No interest on drawings.
ii. Interest on capital is allowed at the rate of 6% per annum on opening
balance.
iii. Profits and losses will be shared equally.
iv. Dam was entitled to a salary of RM3,000 per annum.
5. Net profit for the year ended 31 December 2017, is amounted to RM180,000.
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CONFIDENTIAL 3 AC/OCT 2018/FAR160
6. Drawings made by partners were as follows:
1 February 2017 1 October 2017
RM RM
Simon 10,000 12,000
Sam 15,600 -
Dam 14,000 10,000
Required:
a. Goodwill statement as at 1 May 2017.
(3 marks)
b. Revaluation statement as at 1 May 2017.
(3 marks)
c. Appropriation statement for the year ended 31 December 2017.
(7 marks)
d. Partner’s Capital Statement and Partner’s Current Statement for the year ended 31
December 2017.
(9 marks)
(TOTAL: 25 marks)
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CONFIDENTIAL 4 AC/OCT 2018/FAR160
QUESTION 2
A. a. Give reasons why companies issue bonus shares.
(1 marks)
b. State FOUR (4) types of companies
(2 marks)
B. Given below is the Statement of Financial Position extract of Rosella Bhd as at 31
December 2017.
Issued and paid up capital RM
12,000,000 Ordinary shares 6,000,000
1,000,000 7% Preference shares 2,000,000
Reserves
Retained earnings 1,230,000
Assets
Bank 400,000
During the year 2017, the directors of Rosella Bhd decided the following:
1. On 1 July 2017, in order to support the expansion of the business, the
company decided to issue 2,000,000 units ordinary shares at RM0.30 per
share. The company also issued 500,000 units of preference shares at
RM2.20. The shares issued were payable in full on application.
2. As on 31 July 2017, the application received for the issue of preference
shares and ordinary shares were 250,000 units and 4,000,000 units
respectively. The money received on oversubscribed shares were refunded
to the applicants.
3. On 1 October 2017, the company issued RM500,000 6% debentures at 96.
The issuance cost for the related issue was RM15,000. It is assumed that the
effective interest rate is 10% and the debenture interest was paid at the end
of the year on 31 December 2017.
Required:
i. Prepare the relevant journal entries to record all the above transactions for the year
ended 31 December 2017. (Narration are not required)
(15 marks)
ii. Prepare an extract of Statement of Financial Position (extract) as at 31 December
2017 (Equity and Liabilities sections only).
(7 marks)
(TOTAL: 25 marks)
END OF QUESTION PAPER
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