Briefing on ACT3121
Contents:
 Main aspects in the syllabus
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Past Exam questions
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Partnership
Company Accounts
Theory section
Technical/Calculation section
Q & A Session
1
Partnership
Key areas:
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Characteristics
Advantages & Disadvantages
Partnership Agreement
2
Cont.
Key areas: Accounting for Partnership
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Partnership Capital Account
Fixed Capital Method vs Fluctuating Capital Method
Current Account
Appropriation Account
Accounting Treatments:
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Drawings
Interest on drawings
Interest on capital
Interest on loan
Salaries to partners
3
Comprehensive Example
The net profit for the partnership between Azlan and Chong for the year
ended 31 December 20X8 was RM28,500. The capital accounts and
current accounts for the partnership on 1 January 20X8 were as follow:
Capital accounts:
Azlan
Chong
RM40,000
RM50,000
Current accounts:
Azlan
Chong
RM2,160
RM1,500
In the year 20X8, Azlan has withdraws RM2,000 on 31 Mac 20X8.
Azlan has been paid RM10,000 for his salary.
4
Cont.
The contents of the partnership agreement are as follow:
i. Interest on the initial capital is 5% per year
ii. Azlan would be paid RM12,000 per year for his salary
iii. 8% interest per year would be levied on withdrawals by the partners
iv. Azlan and Chong share a profit/loss in a ratio of 2:3
Prepare:
(a)
The allocation of profit-loss using Profit-Loss Separation Account or
Profit-Loss Separation statement for the year ending 31 December
20X8.
(b)
Capital account and current account for each partner
(c)
A balance sheet (equity section) as at 31 December20X8
5
Cont.
Key areas: Accounting for Partnership

Changes in Partnership
 Change in Profit Sharing Ratio
 Admission of a new partner
 Retirement/death of an existing partner
6
Cont.
If this happened, 2 issues are considered:
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Revaluation of assets
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Goodwill
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Amount is given
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Account not to be maintained
7
Comprehensive Example: Admission
Adil and Bistari are partners sharing profits and losses ratio of 3:2
respectively. Their Balance sheet on 30th June 2009 is:
Assets:
Land and buildings
Machinery
Inventories
Debtors
Liabilities and Equity:
Creditors
Bank overdraft
Capital:
Adil
Bistari
RM40,000
RM16,000
RM10,500
RM30,000
RM15,000
RM6,500
RM45,000
RM30,000
8
Cont.
On 1 July 2009 Adil and Bistari agreed to accept Cerdik as a new partner.
Cerdik has to pay RM25,000 cash including RM5,000 as a premium on
goodwill. He is to share 1/6 of the profits and losses. Adil and Bistari will
share their profits as before.
The following assets were revalued upon admission of Cerdik as follows:
Land and buildings
RM45,000
Inventories
RM10,000
Machinery
RM14,000
Provisions for doubtful debts is to be 1% on debtors.
Prepare:
(a)
Goodwill account (not to be maintained)
(b)
Revaluation account
(c)
Capital account and current account for each partner
(d)
A balance sheet (equity section) as at 1 July 2009
9
Company Accounts
Key areas:
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Types of Companies
Advantages & Disadvantages
Forming a company
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Memorandum of association (MA)
Articles of association (AA)
Procedures to issue shares
10
Cont.
Key areas:
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Capital Equity
 Authorised/Nominal/Registered Capital
 Unissued Capital
 Uncalled Up Capital
 Paid up Capital
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Debentures vs Shares
11
Cont.
Key areas:
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Capital Equity
 Authorised/Nominal/Registered Capital
 Unissued Capital
 Uncalled Up Capital
 Paid up Capital
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Debentures vs Shares
12
Cont.
Key areas:
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Financial Reporting Framework
 Regulatory Framework
Companies Act 1965
Financial Reporting Act 1997 & Accounting Standards
Accountants Act 1967
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Institutional Framework
MASB
Financial Reporting Foundation
13
Equity Financing
Key areas:
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Classes of shares
Ordinary share capital vs Preference share capital
Types of preference shares
14
Cont.
Key areas: Issuance of shares
Directors have a number of options when issuing shares:
1.
2.
Choose to issue ordinary shares, preference shares
or both
Issue shares at their par value, at a premium or at a
discount
15
Cont.
Key areas: Issuance of shares
3.
Shares may be issued
I.
Payable in full on application
II.
Paying a deposit on application and the remainder
on allotment
III.
Part payment on application, part on allotment
and the remainder in one or more installments (or
calls)
16
Cont.
Key areas: Issuance of shares
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Installment
 Application
 Allotment
 Call(s)
 Forfeiture
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Oversubscription
 Refund
 Pro-rata
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Past Exam Questions
Theory Part:
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Normally account to 20%
Cover all topics
Different level of understanding
18
Cont.
Examples: Partnership
Identify and explain two (2) advantages of a partnership.
(4 marks)
‘There is really no need for a partnership agreement since
all issues are covered in the Partnership Act 1961’. Do
you agree with this statement, explain?
(6 marks)
19
Cont.
Examples: Company Accounting
Explain the significance of minimum shares subscription
threshold to company issuing equity shares to public.
(4 Marks)
Discuss the shareholding spread requirements for
Malaysia listed incorporated companies and foreign
companies in Malaysia.
(4 Marks)
20
Cont.
Answer Scheme: Company Accounting
Refer to Word File
21
Past Exam Questions
Technical/Calculation Part:
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As shown in previous slides
Refer to Word File
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