BBM206/03 Accounting and Costing Course Assignment


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Question 1


a.  Describe the difference between depreciation and (5 marks)

b.  Outline the accounting entries required when plant assets are disposed by a company.     (10 marks)


Question 2

Style photo sells only one product. The statement of comprehensive income for 2021 is provided below:


Sales 60,000
Less variable expenses (30,000)
Contribution margin 30,000
Less fixed expenses (22,500)
Net income 7,500



Calculate with workings:


a.  The contribution margin ratio in (3 marks)

b.  The breakeven point in total sales (3 marks)

c.  The sales in RM if the company wants to achieve RM40,000 in net income. (4 marks)

d.  The increase in net income if sales increase by RM50,000. (3 marks)

e.  The contribution margin in RM if there is no change in fixed and variable (2 marks)


Question 3


The following are the ledger balances for Elle Cosmetic as at 30 June 2021:


Sales 44,450
Opening inventory 7,000
Purchases 38,600
Carriage inwards 480
Salaries 6,500
Rents 600
Discount Allowed 200
Repairs and maintenance 2,000
Insurance (for 8 months only) 160
Stationery 100
Commissions paid 260
Interest expense 240
General Expenses 120
Office Equipment 4,400
Bank Overdraft 600
Accounts Receivable 6,800
Provision for Doubtful Debts 200
Accounts Payables 3,200
Mortgage 2,000
Capital 17,010


Below is the additional information which was left out by the accounts clerk.

  • The closing inventory as at 30 June 2021 was RM7,400.
  • Prepaid rents were RM60.
  • Insurance expenses unpaid for 4 months was RM80.
  • Accrued salaries were RM150.
  • Depreciation on equipment: 10% on cost.
  • The provision for doubtful debts is to be made equal to 6% of the Accounts Receivables.




a.  The Statement of Comprehensive Income for the year ended 30 June 2021. (8 marks)

b.  The Statement of Financial Position as at 30 June 2021.      (7 marks)


Question 4

The following information is taken from Tanaka Bhd for the year ended 31 December 2020.


Preference dividend declared and fully paid in 2020: RM100,000

Ordinary dividend declared and fully paid in 2020: RM3,960,000

Preference share marketable price per unit at 31 December 2020: RM4.60

Ordinary share marketable price per unit at 31 December 2020: RM9.00


Tanaka Bhd
Statement of Comprehensive Income for the year ended 31 December
Sales   100,000
Less: Cost of sales   (65,000)
Gross profit   35,000
Less: Expenses    
Marketing expenses (13,000)  
Administration expenses (9,200)  
Finance expenses (2,880) (25,080)
Operating profit before tax   9.920
Taxation   (3,472)
Operating profit after tax   6,448



Tanaka Bhd
Statement of Financial Position as at 31 December
  2020 2019
Non-current assets RM’000 RM’000
Furniture (Net book value) 31,840 29,200
Current assets    
Cash at bank 2,448 3,520
Inventory 13,000 13,200
Accounts receivable 7,600 7,000
Quoted shares 600 500
  23,648 24,220
Current liabilities    
Accounts payable 10,400 10,920
Accruals 300 500
  10,700 11,420
Working capital 12,948 12,800
Non-current liabilities    
Long term loan 18,400 18,000
Net assets 26,388 24,000
Shareholder’s equity    
14.4 million ordinary shares 14,400 14,400
500,000 9% preference share 1,000 1,000
Retained profits 10,988 8,600
  26,388 24,000





a.  Calculate the following ratio for 2020:  Industry average ratio


Current ratio                                                              3 : 1

Quick ratio                                                                 1 : 1

Asset turnover                                                           2. 0

Profit margin                                                             4.0%

Earnings per share                                                  RM0.46

Rate of return on total assets                                11.0%


Assumption: all sales in credit; finance expense means interest; ordinary share outstanding throughout both years = 10,000,000 shares.     (6 marks)


b.  From the industry average, identify and comment on Tanaka Bhd’s profitability and short- term (9 marks)


Question 5


Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue 300,000 ordinary shares on the following terms:


Application RM1 per share

Allotment RM2 per share

Call as required RM1 per share


To the end of August, applications for 350,000 shares had been received together with the application money due on each share. One applicant for 5,000 shares had forwarded RM20,000 in full payment of the shares.


On 15 September, the directors proceeded to allot 300,000 ordinary shares on the following basis. Applicants for 30,000 shares were refunded their application money in full, 5,000 shares were allotted to the applicant who paid for the shares in full, and the other successful applicants were allotted the remaining shares, excess application money being transferred to allotment.


On 7 October, all allotment money had been received.


A first and final call was made on 1 November, and all call money was received by 30 November with the exception of the amount due on 6,000 shares.



  • Prepare journal entries to record the above Narrations are required.  (30 marks)
  • Explain what is meant by oversubscription and the measures that a company can take under this situation. (10 marks)



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