MC 5 Cash-1

BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I (A201)
MINI CASE 5
TOPIC 6: CASH
Submission Guidelines:
1) Please answer all questions.
2) Please write your name, matric number, group on the header and page number on
the bottom of your answer document.
3) The mini case is an individual task, however discussion is allowed, but copying other
student’s answer is forbidden.
4) Your answer should be handwritten and subsequently scanned with a scanner or
mobile scanner apps in a combined PDF file. The scanned document must be clear,
easily readable and complete. Photo is not allowed.
5) Submit your scanned answer via UUM Online Learning within the allotted time and
period. Only one submission will be accepted.
QUESTION 1
You went for a job interview as an accountant at PKP Bhd. During the interviewing session,
you were asked with regards to your ability to do a reconciliation of the bank statement. In
confirming your ability, the interviewer handed over the following information for 30 June
2020:
(i) The bank statement balance is RM14,070.

(ii) The cash account balance is RM15,141.
(iii) Outstanding checks amounted to RM2,145.
(iv) Deposits in transit are RM3,060.
(v) The bank service charge is RM120.
(vi) A check for RM95 for supplies was recorded as RM59 in the ledger.
REQUIRED:
(a) Prepare the bank reconciliation statement of PKP Bhd for 30 June 2020.
(b) Discuss any TWO (2) basic guidelines for the control of cash in a company.
(c) State any TWO (2) policies and procedures demonstrating the primary purpose of internal
control in a company.
1
QUESTION 2
Tangan Bertuah Bhd is a new company operated in Northern region of Malaysia. As of 31

October 2020, the Tangan Bertuah Bhd’s cash account per its general ledger showed the
following balance.
CASH
Date Explanation Ref. Debit Credit Balance
(RM) (RM) (RM)
October 31 Balance 33,822
The bank statement from Jibrail Bank Bhd on that date showed the balance as at 31 October
2020 was RM34,022.50. A comparison of the details on the bank statements with the details in
the cash account revealed the following facts:
1. The statement included a debit memo of RM200 for the printing of additional company
checks.
2. Cash sales of RM4,180.75 on 12 October were deposited in the bank. The cash receipts
journal entry and the deposit slip were incorrectly made for RM4,230.75, the bank credited
Tangan Bertuah Bhd for the correct amount.
3. Outstanding checks at 31 October totalled RM1,381.25, and deposits in transit were

RM4,680.75.
4. On 18 October, the company issued check no. 211222 for RM3,425 to Mikail Sdn Bhd, on
account. The check, which was cleared by the bank, was incorrectly journalized and posted
by Tangan Bertuah Bhd as RM3,290.
5. A RM10,000 note receivable was collected by the bank for Tangan Bertuah Bhd on 31
October plus RM400 interest. The bank charged a collection fee of RM15. No interest has
been accrued on the note.
6. Included with the cancelled checks was a check issued by Kasturi Enterprise to Jebat
Bertuah Sdn Bhd for RM3,000 that was incorrectly charged to Tangan Bertuah Bhd by the
bank.
7. On 31 October, the bank statement showed a NSF (non-sufficient fund) charge of RM3,500
for a check issued by Penjaga Kota Enterprise, a customer to Tangan Bertuah Bhd on
account.
REQUIRED:
(a) Prepare the bank reconciliation as at 31 October 2020.
(b) Briefly explain TWO (2) reasons how a bank account could be an internal control
mechanism.
2
QUESTION 3
Ikhlas Sejati Bhd distributes suitcases to retail stores around Kedah and Pulau Pinang. The
following are financial statements of Ikhlas Sejati Bhd for year 2019.
Ikhlas Sejati Bhd

Statement of Financial Position
As at 31 December 2019
2019 2018
RM RM
Equipment 370,000 322,000
Accumulated depreciation (88,000) (68,000)
Inventories 102,000 142,000
Short-term investments 92,000 58,000
Prepaid rent 32,000 30,000
Accounts receivable 146,000 120,000
Cash 148,000 162,000
Total assets 802,000 766,000
Share capital –ordinary (RM10 par value) 304,000 304,000

Retained earnings 136,000 94,000
Long-term loans payable 142,000 156,000
Accounts payable 114,000 106,000
Income tax payable 30,000 34,000
Salary payable 38,000 30,000
Short-term loan payable 38,000 42,000
Total equity and liabilities 802,000 766,000
3
Ikhlas Sejati Bhd
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2019
RM RM
Sales 698,300
Cost of goods sold (372,000)
Gross profit 326,300
Operating expenses (218,000)
Operating income 108,300
Interest expense 44,800
Gain on sale of equipment 26,000 (18,800)
Income before income tax 89,500
Income tax expense (35,500)
Net income 54,000
Additional information:
1. Dividends in the amount of RM12,000 were declared and paid during 2019.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealised gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of RM50,000 and was 70% depreciated was sold during
2019.
REQUIRED:
(a) Prepare the Statement of Cash Flows for Ikhlas Sejati Bhd for the year ended 31
December 2019 using indirect method in accordance to MFRS 107 Statement of
Cash Flows.
(b) The objective of financial reporting is to provide financial information about the
reporting entity that is useful to users in making financial decisions. Briefly explain
ONE (1) information that can be used by users for financial decision making based
on statement of cash flows.

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BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I (A201)

(i) The bank statement balance is RM14,070.

Tangan Bertuah Bhd is a new company operated in Northern region of Malaysia. As of 31

3. Outstanding checks at 31 October totalled RM1,381.25, and deposits in transit were

(a) Prepare the bank reconciliation as at 31 October 2020.

Ikhlas Sejati Bhd

Share capital –ordinary (RM10 par value) 304,000 304,000

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