question archive On 1 April 2020, Adam Syaqif began a new business called Cepat Cetak Sdn
On 1 April 2020, Adam Syaqif began a new business called Cepat Cetak Sdn
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On 1 April 2020, Adam Syaqif began a new business called Cepat Cetak Sdn. Bhd, which provides typing and printing services. The following is a list of transactions incurred by the business during the month of April 2020:
i) Adam Syaqif contributed RM200,000 cash into the business.
ii) Purchased a land and a small building for RM450,000. He paid RM165,000 cash and signed a note payable for the balance. The land was considered to be worth RM240,000 and the building to be RM210,000.
iii) Purchased office equipment for RM30,000 from Amazing Interiors Sdn. Bhd. He paid RM17,000 cash and agreed to pay the balance within 60 days.
iv) Purchased a motorcycle on credit for RM3,400 to be used for making deliveries to customers. He agreed to make payment to Motorex Sdn. Bhd. within 10 days.
v) Paid in full the account payable to Motorex Sdn. Bhd.
vi) Borrowed RM30,000 from Bank Kaya and signed a note payable due in six months' time.
Based on the above information:
a) Prepare the journal entries for all the above transactions.
b) Post all the relevant accounts to ledgers.
c) Prepare trial balance as at 30 April 2020.
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Answer:
a) Journal entries:
i) Dr Cash 200,000
Cr Adam Syaqif, Capital 200,000
To record owner's investment
ii) Dr Land 240,000
Dr Building 210,000
Cr Cash 165,000
Cr Notes payable 285,000
To record purchase of land and building
iii) Dr Office equipment 30,000
Cr Cash 17,000
Cr Accounts payable 13,000
To record purchase of office equipment
iv) Dr Delivery vehicle 3,400
Cr Accounts payable 3,400
To record purchase of delivery vehicle
v) Dr Accounts payable 3,400
Cr Cash 3,400
To record payment to Motorex Sdn Bhd
vi) Dr Cash 30,000
Cr Notes payable 30,000
To record issuance of note payable
b-c) The ledgers to be setup and their ending balances to be forwarded to the trial balance are as follows:
Cash 44,600 (dr)
Land 240,000 (dr)
Building 210,000 (dr)
Office equipment 30,000 (dr)
Delivery vehicle 3,400 (dr)
Accounts payable 13,000 (cr)
Notes payable 315,000 (cr)
Adam Syaqif, capital 200,000 (cr)
Total debits 528,000
Total credits 528,000
PFA
