Financial Accounting and Reporting I Assignment Sept 2025 | MSU

University	Management & Science University (MSU)
Subject	Financial Accounting and Reporting I

ASSIGNMENT (100 Marks) (10%)

BUSINESS TRANSACTIONS REPORTING AND FINANCIAL RATIOS ANALYSIS

INSTRUCTIONS:

Students must attempt and finalize the case study of business transactions reporting.
The finalized answer shall be submitted either handwriting or typing using Microsoft Word or Microsoft Excel. Both options must contain the following details:
i. Name and ID on the front page
ii. Proper numbering question
iii. Student’s photo

The deadline of submission is 12 DECEMBER 2025 in GC
All submissions must be submitted in PDF format.

COURSE LEARNING OUTCOMES:

CLO3 Prepare financial statements and interpret financial ratios.

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CASE STUDY:

Post-Pandemic Business Recovery in Malaysia (2025)

In 2025, Malaysia continues to face a challenging economic environment marked by rising operating costs, the 2024–2025 increase in SST to 8%, unstable ringgit performance, and the government’s push for SME digitalisation under initiatives such as MADANI Economy Framework, Digitalisation Grant and SME Automation Programmes.

You are appointed as a junior accountant for Pasti Maju Sdn. Bhd, a SME company based in Selangor that produces bakery products for physical retail customers and online platforms such as GrabFood and ShopeeFood. The business recently applied for a micro-financing facility from SME Bank. To support the loan application, the business needs accurate year-end financial statements and an evaluation of the business performance.

You are given the following unadjusted trial balance for the year ended 31 December 2025:

Unadjusted Trial Balance of Pasti Maju Sdn. Bhd as at 31 December 2025

	RM (Debit)	RM (Credit)
Cash	6,700
Bank	18,900
Trade Receivable	25,400
Inventory (1 Jan 2025)	12,500
Prepaid Insurance	2,400
Shop Equipment	45,000
Accumulated Depreciation – Shop Equipment		10,500
Trade Payable		21,800
Bank Loan		30,000
Ordinary Share Capital		57,000
Import duty	8,000
Sales		185,700
Purchases	92,800
Carriage Inwards	3,200
Wages and Salaries	46,500
Utilities Expense	9,700
Rent Expense	24,000
Marketing Expense	5,600
Delivery Expense	4,300
	305,000	305,000

Additional Information:

Inventory as at 31 December 2025 is RM15,300.
Insurance expired during the year amounted to RM1,800.
Depreciation on shop equipment is provided at 10% per annum on cost.
Outstanding utilities amounted to RM1,250.
Prepaid rent of RM2,000 was included in rent expense.
Create Allowance for Doubtful Debts at 5% of trade receivable.
The business incurred RM1,200 to purchase stationery. This was not yet recorded.
SST (8%) was charged on bakery sales but RM3,500 SST Output Tax was not yet recorded in the books.
A government SME Digitalisation Grant was approved for software purchases costing RM4,000 but only RM2,000 received so far. It has not been recorded.

REQUIRED:

(a) Prepare the following financial statements for Pasti Maju Sdn. Bhd.

i. Statement of Profit or Loss for the year ended 31 December 2025 ii. Statement of Financial Position as at 31 December 2025 (30 marks)

(b) Compute the following financial ratios for the year 2025:

i. Gross Profit Margin
ii. Net Profit Margin
iii. Current Ratio
iv. Acid-Test Ratio
v. Inventory Turnover (times) vi. Return on Capital Employed (ROCE) (20 marks)

i. Evaluate the financial performance and position of Pasti Maju Sdn. Bhd in relation to:

1. Rising SST impact on SME profit margins
2. Malaysia’s current inflation and cost-of-living trends
3. Online delivery platform commissions affecting SMEs

ii. Critically assess whether Pasti Maju Sdn. Bhd. is in a strong position to obtain the SME Bank financing. Support your argument using:

1. Ratio analysis
2. Cash flow considerations
3. Market trends affecting Malaysian SMEs in 2025
4. Growth potential due to digitalisation grants

iii. Provide FOUR (4) strategic recommendations to help the business improve profitability or liquidity in 2026. (50 marks)

ALL THE BEST !!

Marking Criteria

Component	Scale 4 (Excellent)	Scale 3 (Good)	Scale 2 (Satisfactory)	Scale 1 (Weak)	Marks
(i) Evaluation of Financial Performance & Position *(SST impact, inflation, delivery platform commissions, ratios)* 15 marks	Provides comprehensive, insightful evaluation. Strong integration of ratios (GPM, NPM, ROCE, liquidity) with SST, inflation and platform commissions. Deep understanding of Malaysian SME environment.	Good evaluation with relevant points and some ratio use. Connections to economic issues present but less detailed.	Basic explanation with limited links to SST or economic trends. Ratios mentioned but not explained well.	Minimal or inaccurate analysis. No meaningful link to ratios or Malaysian conditions.
(ii) Assessment of SME Bank Loan Eligibility *(Ratios, cash flow, SME trends, digitalisation grant)* 15 marks	Highly analytical and welljustified conclusion. Strong use of ratios, cash flow reasoning, SME trends and digitalisation factors.	Reasonable conclusion with some justification using ratios and trends. Moderate critical thinking.	Basic assessment with general statements. Some mention of ratios or trends but weak reasoning.	Unsupported opinion, not backed by financial or economic analysis.
(iii) FOUR Strategic Recommendations *(Profitability, liquidity, efficiency, digitalisation)* 20 marks	Four highly relevant, practical, and strategic recommendations. Well justified, aligned with analysis, realistic for SMEs.	Four reasonable and relevant recommendations with moderate justification.	2–3 relevant recommendations OR 4 recommendations with weak justification.	Only 1 idea OR recommendations irrelevant or not justified.
TOTAL					50 marks

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