LLV Sdn Bhd was incorporated in April 2018. The company produces plastic container for local market. The company provides the following financial information that relates to its operation for the month ended 31 March 2019: LLV Sdn Bhd Statement of Profit or Loss and Other Comprehensive Income For the month ended 31 March 2019 RM RM Sales 900,000 Less : Indirect labor cost 24,000 Utilities expenses 30,000 Direct labor cost 140,000 Depreciation – factory equipment 42,000 Raw materials purchased 330,000 Depreciation – sales equipment 36,000 Insurance expenses 8,000 Rental expenses 100,000 Selling and administrative salaries 64,000 Advertising expenses 150,000 924,000 Net loss (24,000) The manager of LLV Sdn Bhd was disappointed with the loss appeared in the Statement of Profit or Loss and Other Comprehensive Income (SPLOCI). He said “This month’s loss is worse than the other months. I think it’s time to start looking for someone to buy out the company’s assets. If we don’t do that, within a few months, there won’t be any assets to sell”. Mrs.Mimi, the new company’s accountant, disagreed with the manager’s decision. She believes that there was something wrong with the SPLOCI and asked her assistant to investigate. After several days, her assistant provided her with the following information: Some of the operating expenses declared in the SPLOCI are a combination of factory operations and selling and administrative activities. Below are the correct distribution: Utilities expenses: 60% for factory and 40% for selling and administrative. Insurance expenses: 75% for factory and 25% for selling and administrative Rental expenses: 80 % for factory and 20% for selling and administrative Inventory balances for the month of March 2019 are as follows: 1 March 2019 (RM) 31 March 2019 (RM) Raw materials 16,000 26,000 Work in process 32,000 42,000 Finished goods 80,000 120,000 REQUIRED: Prepare a complete statement/schedule of cost of goods manufactured for the month ended 31 March 2019. (Show clearly all workings.)
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
LLV Sdn Bhd was incorporated in April 2018. The company produces plastic container for local market. The company provides the following financial information that relates to its operation for the month ended 31 March 2019:
LLV Sdn Bhd
Statement of Profit or Loss and Other Comprehensive Income
For the month ended 31 March 2019
|
|
RM |
RM |
|
Sales |
|
900,000 |
|
Less : |
|
|
|
Indirect labor cost |
24,000 |
|
|
Utilities expenses |
30,000 |
|
|
Direct labor cost |
140,000 |
|
|
Depreciation – factory equipment |
42,000 |
|
|
Raw materials purchased |
330,000 |
|
|
Depreciation – sales equipment |
36,000 |
|
|
Insurance expenses |
8,000 |
|
|
Rental expenses |
100,000 |
|
|
Selling and administrative salaries |
64,000 |
|
|
Advertising expenses |
150,000 |
924,000 |
|
Net loss |
|
(24,000) |
The manager of LLV Sdn Bhd was disappointed with the loss appeared in the Statement of
Profit or Loss and Other Comprehensive Income (SPLOCI). He said “This month’s loss is worse than the other months. I think it’s time to start looking for someone to buy out the company’s assets. If we don’t do that, within a few months, there won’t be any assets to sell”.
Mrs.Mimi, the new company’s accountant, disagreed with the manager’s decision. She believes that there was something wrong with the SPLOCI and asked her assistant to investigate. After several days, her assistant provided her with the following information:
- Some of the operating expenses declared in the SPLOCI are a combination of factory operations and selling and administrative activities. Below are the correct distribution:
- Utilities expenses: 60% for factory and 40% for selling and administrative.
- Insurance expenses: 75% for factory and 25% for selling and administrative
- Rental expenses: 80 % for factory and 20% for selling and administrative
- Inventory balances for the month of March 2019 are as follows:
|
|
1 March 2019 (RM) |
31 March 2019 (RM) |
|
Raw materials |
16,000 |
26,000 |
|
Work in process |
32,000 |
42,000 |
|
Finished goods |
80,000 |
120,000 |
REQUIRED:
Prepare a complete statement/schedule of cost of goods manufactured for the month ended 31 March 2019. (Show clearly all workings.)
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