CHAPTER 6

ADJUSTMENT ACCOUNT

COMPILATION OF
QUESTION

QUESTION 1
Below is the Trial Balance of Lizam Sdn Bhd as at 31st May 2010.
 Lizam Sdn Bhd
Trial Balance as at 31 May 2010
Debit (RM) Credit (RM)
Capital 100,000
Stock 5,130
Land and Building 82,000
Fixture and Fitting 2,000
Cash 20,720
Bank 2,740
Drawing 1,150
Motor Vehicles 45,000
Debtor and Creditor 13,000 12,000
Provision for Bad Debt 600
Provision for depreciation - motor vehicles 4,000
Salary 3,750
Carriage inward 100
Carriage outward 400
Discount 500 200
Rental 550 5,100
Purchase and sale 13,000 63,700
Return 700 200
Insurance on purchase 300
Commission 450 210
188 750 188750

Additional information:
1. Closing stock at market value and cost value are RM 1 540 and RM 1 650 respectively.
2. Total rental received is for 15 month
3. Commission paid is for 10 months only.
4. Mr Zamli has taken RM 350 cash per month for one year and good RM 1,200 for personal use.
No entry has been made in the books of the business.
5. Bad debt to be written off is RM 1000.
6. Provision for doubtful debt is 7% on debtors.
 7. Provision for depreciation for non current asset is 10% per annum on cost.
You are required to prepare
a) Statement of comprehensive income for the year ended 31 May 2010 (15 marks)
b) Statement of Financial Position as at 31 May 2010 (15 marks)

QUESTION 2
The following trial balance were extracted from the books of Syarikat D’Nurra for the year ended 31
December 2010
Syarikat D’Nurra
Trial Balance as at 31 December 2010
Items Debit (RM) Credit (RM)
Capital on 1 January 2001 47400
Office equipment (cost) 8000
Accumulated depreciation for office equipment 800
Drawings 600
Premises 39400
Carriage inwards 960
Rental received 5500
Import duties 460
Bank 7050
Stock on 1st January 2010 2400
Maintenance expenses 180
Fixtures and Fittings(cost) 4500
Purchases 25400
Return outwards 400
Sales 37610
Return inwards 200
Fixed deposit 5000
Interest in fixed deposit 250
Debtors 2300
Creditors 1375
Provision for doubtful debts 85
Insurance 770
Cash 368
Utilities expenses 117
Long term loan 8000
Salaries 4200
Wages 225
Discounts 390
Commission 320
102130 102130

Additional information:
1) Stock as at 31 December 2010 is RM3620
2) Rental income received only for 11 months. Rental for December still not received.
 3) Interest on fixed deposits 6% per annum.
4) Insurance used RM380 only.
5) Utilities expenses accrued at RM33.
6) The depreciation rate for Office equipment and Fixtures and Fittings is 10% based on straight
line method.
7) Provision for doubtful debts is adjusted for 5% from debtors.

You are required to prepare:

a) Income Statement for the year ended 31 December 2010. (15 marks)
b) Balance Sheet as at 31 December 2010. (10 marks)

QUESTION 3
The following information was obtained from Afiq Sport Centre as at 31 July 2009.
Particulars RM
Beginning inventories 7,950
Capital 60,000
Purchases 40,100
Sales 64,540
Return inwards 550
Return outwards 480
Debtors 16,800
 Creditors 10,420
Drawings 3,600
Cash 1,580
Premises 40,000
Fixtures and fittings 28,000
Provision for depreciation- fixtures and fittings 2,800
Provision for doubtful debt 1,100
Carriage inwards 890
Carriage outwards 670
Discount allowed 810
Discount received 1,050
Commission received 350
Import duty 4,100
Promotion expenses 1,880
Insurance 720
Bad debts 270
Bank loan 15,000
Interest on bank loan 750
Salary 5,650
General expenses 1,420

Additional information :
1) Salary accrued as at 31 July 2009 was RM 1,560.
2) Insurance represented 6 months premium until 31 October 2009.
3) A debtor cannot settle his debt amounting to RM 200.
4) Provision for doubtful debt is provided at 10% on total debtors.
5) Fixtures and fittings depreciated at 10% per annum on cost.
6) A store was built in the business premises worth RM 1,500 and the payment was made by
cash. This transaction is completely omitted from the books
You are required to prepare:
a) A trial balance before adjustment (10 marks)

b) Income and Expenses Statement (CLO3) (15 marks)

c) Statement Of Financial Position/ Balance Sheet (CLO3) (10 marks)
QUESTION 4
Mr Hazran is sole proprietor . The following information was obtained from the book of his business on
31 December 2014
Trial Balance as at 31 December 2014
Particulars Debited Credited
(RM) (RM)
Motor Vehicle 30,000
Furniture 8,500
Building 40,000
Opening Inventories 5,500
Debtors 8,000
Creditors 12,000
Provision For Depreciation—Motor Vehicle 3,000
Provision For Depreciation-Furniture 1,500
Provision For Doubtful Debt 200
Cash 15,000
Bank 3,000
 Salary 1,200
Returned 700 900
Discount 500 800
Electricity And Water 350
Rent 600
Sales And Purchase 4,000 10,000
Capital 82,950
114350 114350

Additional information :
i) Closing inventories at the cost price of rm7000 and at the market price of rm6800
ii) The depreciation rate for motor vehicles is 10% on cost and for furniture 5% on cost
iii) The allowance for doubtful debt is 3% on accounts receivable
iv) Accrued electricity and water bill is RM50
v) Rent paid is RM45 per month
You are required to prepare:
d) Comprehensive of Income Statement for the year ended 31 December 2014 (15 marks)
e) Statement Of Financial Position/ Balance Sheet as at 31 December 2014 (10 marks)

QUESTION 5
The following Trial Balance is extracted from the books of Free Trade Bhd as at 31 December 2010:

Debit (RM) Credit (RM)

155,000
Capital
100,000
Building
45,000
Office equipment
35,000
Bank
96,655 159,350
Purchases and Sales
5,400 3,400
Return Inwards and Return outwards
5,500
Bad debts
45,690
Opening stock
3,000
Carriage outwards
2,500
Carriage inwards
 5,000
Insurance
33,055
Salary
60,000
Loan
44,000 52,000
Debtors and Creditors
4,000
Provision for Doubtful Debt
2,330 1,430
Discount
2,550
Motor expenses
9,500
Cash
435,180 435,180

Additional information for the year ending 31 December 2010:

1. Stock as at 31 December 2010 is RM23, 000.
2. Insurance is paid in advance of RM1,250.
3. The outstanding bills of water & electricity which amounted to RM 2,000.
4. Provision for Doubtful Debt needs to be adjusted at 10%.

5. Provision for depreciation needs to be created based on the straight line method:
Building 10 years of useful life
Office Equipment 5 years of useful life

Required:

a) Income Statement for the year ended 31 December 2010 (15 marks)
b) Balance Sheet as at 31 December 2010 (10 marks)
QUESTION 6
The following is a trial balance for Success Enterprise ;

Success Enterprise
Trial Balance
As At 30 September 2010
Debit Credit
RM RM
Sales 21,000
Purchases 19,500
Return inwards 300
Return outwards 420
Salaries 1,000
Discount received 800
Duty on purchases 600
Freight inwards 200
Freight outwards 400
Advertising 600
Premises 12,000
Office equipment 1,350
Capital 30,040
Debtors 2,000
Creditors 2,400
Inventory (on 1 October 2009) 1,210
Bank 13,000
 Rent 2,500
54,660 54,660

Additional information :
i. Accrued salaries was RM120. The monthly rent is RM200 and was paid for one year.
ii. The amount of bad debt is RM300.
iii. The inventory as at 30 September 2010 are at RM980 valued on market price and RM1,020 on
cost.
iv. The provision for doubtful debt is 1% from debtors.
v. The office equipment is depreciated at 10% per annum on straight line basis.
vi. RM1,100 of the owner’s money was used to extend the business premise.

You are required to prepare these accounts:

(a) Income Statement for the year end 30 September 2010 (15 marks)
(b) Balance Sheet as at 30 September 2010 (10 marks)

QUESTION 7
Below is the Trial balance for Perniagaan Zultan as at 31 December 2008

TRIAL BALANCE FOR PERNIAGAAN ZULTAN AS AT 31 DECEMBER 2008

RM RM
Building 50000
Stock 17000
Returned 400
Bank 1980
Rental 3200
Salary 6000
Drawings 360
Insurance 1200
Capital 58370
Rates 3000
Debtors and Creditors 9250 7000
Purchases and sales 56000 75000
Provision for bad debt 80
 Stationery 420
Advertisement 2000
145630 145630

Additional Information:
a) Closing stock RM15000
b) Bad Debt RM50
c) Provision to bad debt 2% from net debtors
d) Rates accrued RM600
e) Rental received each month is RM300.

You are required to prepare:

a) Income statement at the end of 31 December 2008
b) Balance sheet at the above date.
QUESTION 8
Below is the Trial balance for Perniagaan Rizal as at 30 June 2004

TRIAL BALANCE FOR PERNIAGAAN RIZAL AS AT 31 JUNE 2004

RM RM
Stock 6700
Returned 400
Bank 6000
Rental 1400 3900
Salary 1200
Drawings 500
Insurance on purchase 1600
Capital 5970
Rates 3000
Debtors and Creditors 12500 10000
Purchases and sales 72320 123600
Vehicle 18200
Office equipment 6500
furniture 8000
Accumulated Depreciation :
 Office equipment 650
Furniture 800
Returned 700
Carriage expense 1500
Cash 3000
Discount 1900 500
145420 145420

Additional Information:
a. Closing stock RM8100 at cost price and RM7900 at market price
b. Depreciation for vehicle, office equipment and furniture is 10% from the cost price
c. Carriage expenses divided to inward and outward at 2: 1
d. Prepaid rental RM200
e. The owners took RM 100 from cash for his personal used

You are required to prepare:

c) Income statement at the end of 31 December 200X
d) Balance sheet at the above date.
QUESTION 9
Below is the trial balance for Perniagaan Pepaya as at 31 December 2007

RM RM
Capital 40,304
Drawings 3,707
Shop Building (Cost) 33,803
Equipment (Cost) 16,500
Accumulated Dep. For Equipment 6,600
Stock at 1 Jan 2007 3,383
Purchased 23,683
Sales 38,181
Returned 72 61
Salary 2,574
Utilities 946
Advertisement 1,023
Bad Debt 682
Provision of bad debt 517
Commissions 1,568
General Expenses 104
Creditors 2,546
Debtors 3,630
Rental 2,310
Bank 1,980
92087 92087
Additional Information:
1. Closing Stock at 31 December 2007 valued RM3646
2. Accrued utilities RM352
3. Advertisement expense for year 2007 is RM687
4. Accrued Commission received RM1238
5. Prepaid rental is RM330
6. Depreciation for Equipment is 20% at cost price
7. Provision for bad debt is 5% from debtors
You are required to prepare:
a) Income Statement at the end of 31 December 2007
b) Balance Sheet at the above date (25 marks)
QUESTION 10
Below is the Trial Balance for Syarikat Huru Hara as at 30 June 2005
RM RM
Capital 25000
Drawings 600
Furniture 1250
Vehicle 12500
Stock 3425
Debtors and Creditors 4900 4650
Purchase and sales 9125 10750
Salary 3975
Rental 500
Accumulated Depreciation:
Vehicle 1250
Furniture 25
Returned 275 175
Stationery 315
Discount 225 200
Provision of Bad Debts 150
Cash 5375
Bank 265
42465 42465

On 30 Jun 2005, this additional must me calculated in order to prepare a financial statement
a) Closing Stock RM2625
b) Stationery Stock RM280
c) Accrued rental RM200
d) Provision for doubtful debt must added to RM250 Accrued salary RM750
 e) Bad Debt RM300
f) Bad Debt recovery RM320 are received by cash
g) Depreciation for Vehicle is 10% using a straight line method and furniture at rate 10% using a
decline balance method

You are required to prepare:

a) Income Statement at the end of 30 June 2005
b) Balance Sheet at the above date (25 marks)
QUESTION 11
Encik Tong Sam is the owner of Kedai Runcit Pasti Murah. Below is the trial balance for Kedai Runcit
Pasti Murah as at 28 Feb 2008
RM RM
Bank 14150
Capital 13105
Purchased and sales 32715 38500
Returned 205 260
Duty Import 250
Vehicle 8950
Accumulated Depreciation for Vehicle 2655
Provision for bad debt 175
Drawings 100
Insurance 725
Debtors and creditors 2250 2700
Fitting and fixtures 1500
Acc. Dep. For Fitting and fixtures 300
Outward Carriage 450
Discount 2670 2365
Bad Debt 555
Dividend 540
Rates 450
Telephone Deposit 140
Opening Stock 1 Mac 2007 4790
Investment 19000
74750 74750

Additional Information:
a. Closing Stock as at 28 Feb 2008 is RM5990 at cost price
b. Prepaid Duty import RM75
 c. Accrued insurance RM260
d. RM900 abolished as bad debt and Provision of doubtful bad debt is adjusted 10% on debtors
e. Depreciation for vehicle is 10% per annum using a balance declining method
f. Encik Tong Sam bought in a cupboard worth RM390 to the business on 1 July 2007. Fixtures
are depreciate at rate 20% per annum on it cost.
g. Received RM1990of cash sale and this amount has been put in bank. But this transaction has
not been recorded yet.
You are required to prepare:
a) Income Statement at the end of 28 Feb 2008
b) Balance Sheet at the above date (25 marks)