Reference no: EM132574101
Question - JAFAR OMAR, just graduated from the eminent management university in Northern Malaysia, opened his own shop named TOP ACE in March 2020. He brought in her own car worth RM90,000 for the business use and cash of RM40,000. The following transactions were completed in the very first month of operation:
March 1 Paid RM2,700 for three months rental starting from March 2020. Purchased exhibition racks and paid RM30,000 for the whole amount.
March 2 Purchased merchandise from EAST COAST for RM4,500, FOB shipping point, terms 2/15,n/30.
March 5 Paid freight on purchases from EAST COAST for RM120.
March 7 Purchased decorating merchandise from BABA TRADING STORE for RM5,000. FOB destination, terms 3/10,n/com.
March 8 Cash sales RM2,700. The cost of the merchandise sold was RM810.
March 9 Returned defect foam block to BABA TRADING STORE costing RM400 10 Sold merchandise totalled RM7,800 to ORANG SMART SHOP. Terms 5/10, n/30. The cost of the merchandise was RM2,340.
March 11 Paid EAST COAST the full amount for purchases made on 2 April. Jafar Omar took few sets of floral vases costing RM390 as a present for his wife.
March 15 Obtained a loan from AJEX BANK BERHAD for RM20,000 cash payable in 2 years.
March 17 Sold merchandise costing RM2,250 to EPS EVENT CENTRE for RM7,500. Terms 5/10, n/30.
March 20 Paid BABA TRADING STORE in full. Received payment from ORANG SMART SHOP in full.
March 22 Sold merchandise to ELITE CLUB for RM2,810 and received cash. The cost of the merchandise was RM850.
March 25 Purchased flower buckets and vases from EAST COAST for RM3,500, FOB shipping point, terms 2/10,n/30. Paid freight charges of RM100. Paid RM300 to ELITE CLUB for merchandise retumed that costs RM100.
March 30 Paid utility bills totalled RM310 and RM3, 100 for salary to employees. Purchased a one-year insurance policy starting from May 2019 for RM3,600.
At the end of the month, the following adjustments need to be made:
(i) Rental expenses for the month;
(ii) Vehicles are to be depreciated at the rate of 10% per annum;
(iii) Furniture are to be depreciated at the rate of 5% per annum; and
(iv) A total of RM370 salary remained payable at the end of the month.
Required -
1. Prepare the Statement of Retained Earnings for the month.
2. Prepare the Statement of Financial Position as at the end of the month.