Simpul Kasih Bhd (KASIH) is a company dealing with health food products operating in Kulim, Kedah. The partial statement of the financial position of KASIH as of 31 December 2020 is as follows: Current Liability RM 12% Notes payable 220,000 Interest payable 26,400 Premium liability 11,000 Accounts payable 180,000 Total Current Liability 437,400 Equity Share capital (1,500,000 ordinary shares) 3,300,000 Retained earnings 1,400,000 Total Equity 4,700,000 Following are transactions related to equity and current liabilities that took place during the first quarter of 2021: 1 January Declared a dividend of RM0.20 for each share outstanding on 31 December 2020. 1 January KASIH settled 12% notes payable together with the total interest that have not been paid in last year by signing a new RM400,000, 8%, 5-year long term loan. 31 January Purchased a machine for RM40,000, paying RM10,000 in cash and giving a one year, 8% note for the balance. 21 February Received RM20,000 in advance for RM40,000 health product ordered by Terlalu Beauty Enterprise which is to be delivered in March and April. 5 March Delivered health product ordered on 21 February, worth RM15,000. 18 March Cash sales of RM55,000. 28 March Purchased goods from Jelutong Bhd for an invoice price of RM60,000, terms 2/10, n/30, FOB shipping point. KASIH paid freight costs of RM800. KASIH uses a periodic inventory system and the gross method of accounting for purchase discounts. 31 March Paid gross salaries of RM180,000 to employees. Deductions from the salaries are as follows: 1. Employees’ contribution to EPF of 11% of the gross salary. 2. Zakat amounting to RM4,600. 3. Health insurance premium of RM8,400. 4. All payments to the respective departments are made on 25 April 2021. REQUIRED: Prepare the neccessary adjusting entries (include explanation) on 31 March 2021. Prepare the liability section of Statement Financial Position.
Simpul Kasih Bhd (KASIH) is a company dealing with health food products operating in Kulim, Kedah. The partial statement of the financial position of KASIH as of 31 December 2020 is as follows:
| Current Liability |
RM |
| 12% Notes payable | 220,000 |
| Interest payable | 26,400 |
| Premium liability | 11,000 |
| Accounts payable | 180,000 |
| Total Current Liability | 437,400 |
| Equity | |
| Share capital (1,500,000 ordinary shares) | 3,300,000 |
| 1,400,000 | |
| Total Equity | 4,700,000 |
Following are transactions related to equity and current liabilities that took place during the first quarter of 2021:
1 January Declared a dividend of RM0.20 for each share outstanding on 31 December 2020.
1 January KASIH settled 12% notes payable together with the total interest that have not been paid in last year by signing a new RM400,000, 8%, 5-year long term loan.
31 January Purchased a machine for RM40,000, paying RM10,000 in cash and giving a one year, 8% note for the balance.
21 February Received RM20,000 in advance for RM40,000 health product ordered by Terlalu Beauty Enterprise which is to be delivered in March and April.
5 March Delivered health product ordered on 21 February, worth RM15,000.
18 March Cash sales of RM55,000.
28 March Purchased goods from Jelutong Bhd for an invoice price of RM60,000, terms 2/10, n/30, FOB shipping point. KASIH paid freight costs of RM800. KASIH uses a periodic inventory system and the gross method of accounting for purchase discounts.
31 March Paid gross salaries of RM180,000 to employees. Deductions from the salaries are as follows:
1. Employees’ contribution to EPF of 11% of the gross salary.
2. Zakat amounting to RM4,600.
3. Health insurance premium of RM8,400.
4. All payments to the respective departments are made on 25 April 2021.
REQUIRED:
Prepare the neccessary
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