Reference no: EM133155685

Question 1 - On 1 April 2021, A-Fiq & Co had the following balances:

RM

Office equipment, at cost 111,000

Accumulated depreciation 31,000

An equipment costing RM45,000 (Carrying value at 1 April 2021 was RM30,000) was exchanged for a new equipment costing RM40,000 on 1 October 2021.

The exchange value agreed upon was RM22,000; A cash payment of 10% of the cost of new machine was paid; The balance is to be settled over the next three months.

A-Fiq & Co depreciates its office equipment at 20% on cost.

Required -

a. Determine the profit or loss on the equipment traded in. (All workings must be shown clearly.)

b. Show how the office equipment will be presented on the 30 April 2022 balance sheet.

Question 2 - On April 1, 2021, A-fiq & Co showed the following account balances on its post-closing trial balance:

Account Debit Credit

Accounts receivable RM634,000

Allowance for doubtful accounts RM28,000

During the year ended 31 March 2022, the following events occurred:

1. Sales revenues for the year were RM4,440,000. 75% were on account, 25% were cash sales.

2. Collections for the year were RM3,905,000.

3. Write offs of uncollectible accounts totalled RM27,000.

4. One of the accounts written off previously amounting to RM2,250was collected.

5. On March 31, 2022 (on balance sheet date), using the aging-of-receivables method, the allowance for doubtful accounts was estimated to be RM33,000.

Required -

1. Exhibit the journal entries for the events 1, 3 and 5 above.

2. Show how net receivables will be presented on the 31 March 2022 balance sheet.