# briefing on act3121

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Contents: Main aspects in the syllabus Partnership Company Accounts Past Exam questions Theory section Technical/Calculation section Q & A Session. Briefing on ACT3121. Key areas: Characteristics Advantages & Disadvantages Partnership Agreement. Partnership. - PowerPoint PPT Presentation

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• *Briefing on ACT3121Contents:Main aspects in the syllabusPartnershipCompany Accounts

Past Exam questionsTheory sectionTechnical/Calculation section

Q & A Session

• *Key areas:

• *Key areas: Accounting for Partnership

Partnership Capital AccountFixed Capital Method vs Fluctuating Capital MethodCurrent AccountAppropriation AccountAccounting Treatments:DrawingsInterest on drawingsInterest on capitalInterest on loanSalaries to partnersCont.

• *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:AzlanRM40,000ChongRM50,000

Current accounts: AzlanRM2,160ChongRM1,500

In the year 20X8, Azlan has withdraws RM2,000 on 31 Mac 20X8. Azlan has been paid RM10,000 for his salary.

• *Cont. The contents of the partnership agreement are as follow:i. Interest on the initial capital is 5% per yearii. Azlan would be paid RM12,000 per year for his salaryiii. 8% interest per year would be levied on withdrawals by the partnersiv. Azlan and Chong share a profit/loss in a ratio of 2:3

Prepare:The allocation of profit-loss using Profit-Loss Separation Account or Profit-Loss Separation statement for the year ending 31 December 20X8. Capital account and current account for each partnerA balance sheet (equity section) as at 31 December20X8

• *Key areas: Accounting for Partnership

Changes in PartnershipChange in Profit Sharing RatioAdmission of a new partnerRetirement/death of an existing partner

Cont.

• *If this happened, 2 issues are considered:

Revaluation of assets

Goodwill

Amount is given

Account not to be maintainedCont.

• *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 buildingsRM40,000MachineryRM16,000InventoriesRM10,500DebtorsRM30,000

Liabilities and Equity:CreditorsRM15,000Bank overdraftRM6,500Capital: AdilRM45,000 BistariRM30,000

• *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 buildingsRM45,000InventoriesRM10,000MachineryRM14,000Provisions for doubtful debts is to be 1% on debtors.Prepare:Goodwill account (not to be maintained)Revaluation account Capital account and current account for each partnerA balance sheet (equity section) as at 1 July 2009

• *Key areas:

Types of CompaniesAdvantages & DisadvantagesForming a companyMemorandum of association (MA)Articles of association (AA)Procedures to issue sharesCompany Accounts

• *Key areas:

Capital EquityAuthorised/Nominal/Registered CapitalUnissued CapitalUncalled Up CapitalPaid up Capital

Debentures vs SharesCont.

• *Key areas:

Capital EquityAuthorised/Nominal/Registered CapitalUnissued CapitalUncalled Up CapitalPaid up Capital

Debentures vs SharesCont.

• *Key areas:

Financial Reporting FrameworkRegulatory Framework

Companies Act 1965Financial Reporting Act 1997 & Accounting StandardsAccountants Act 1967

Institutional FrameworkMASBFinancial Reporting Foundation

Cont.

• *Key areas:

Classes of sharesOrdinary share capital vs Preference share capitalTypes of preference sharesEquity Financing

• *Key areas: Issuance of shares

Directors have a number of options when issuing shares:

Choose to issue ordinary shares, preference shares or bothIssue shares at their par value, at a premium or at a discountCont.

• *Key areas: Issuance of shares

Shares may be issuedPayable in full on applicationPaying a deposit on application and the remainder on allotmentPart payment on application, part on allotment and the remainder in one or more installments (or calls)Cont.

• *Key areas: Issuance of shares

InstallmentApplicationAllotmentCall(s)Forfeiture

OversubscriptionRefundPro-rataCont.

• *Theory Part:

Normally account to 20%Cover all topicsDifferent level of understandingPast Exam Questions

• *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)

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)

Cont.