Reference no: EM133101076
Question - Speed Berhad is engaged in the design, development, manufacture, and sale of fully electric vehicles, energy generation and smart storage systems. It also provides vehicle service centers, supercharger station, and self-driving capability. The company is headquartered in Kuala Lumpur. It also has several branch offices in different cities in Malaysia to cater the needs of specific locations.
Separate accounts are kept for each branch. The headquarters bills merchandise to each branch at cost incurred by the headquarters. Expenses incurred by the headquarters on behalf of the branches are billed to the branches. At the end of every accounting period, each branch prepares separate financial statements and send them to the headquarters.
The following account balances were taken from the books of a branch located in Shah Alam for the year ended 31st December 2021.
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Debit (RM)
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Credit (RM)
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Capital
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350,000
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Retained earnings
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46,000
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Borrowings
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60,000
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Long-term loans
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200,000
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Other operating income
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180,000
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Account payable
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77,000
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Bank overdraft
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85,000
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Accrued expenses
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9,000
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Sales
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741,000
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Vehicles
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80,000
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|
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Investment property
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1,000,000
|
|
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Machinery
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260,000
|
|
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Cash
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88,000
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|
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Inventories
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23,000
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|
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Account receivable
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45,000
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|
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Salaries
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193,000
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|
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Utilities
|
10,000
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|
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Prepaid rent
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27,000
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|
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Other operating expenses
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22,000
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|
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1,748,000
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1,748,000
|
Additional information:
1. Goods were supplied to the branch with a headquarters cost of RM11,000.
2. Shipping cost of RM1,000 were paid in cash by the branch to the shipment vendor.
3. Cash sent by the headquarters to the branch for salaries expenses RM33,000.
4. The branch made a credit sale amounted to RM25,000.
5. The branch had acquired an equipment for RM30,000 by cash. As per agreement, the headquarters will maintain all the property, plant and equipment records.
6. The headquarters charged advertising expenses amounted to RM4,500 to the branch.
Required - Based on the information provided, you are required to:
1. Prepare journal entries for the branch.
2. Prepare Statement of Profit or Loss for the year ended 31st December 2021 for the branch.
3. Prepare Statement of Financial Position as at 31st December 2021 for the branch.