This problem is a continuation of Problem 1 and therefore the information obtained from answering Problem 1 will also be used in this problem. Carry out the activities as required below.

a. Enter the following transactions in the general journal of Oscar Ltd.

On 3 May, Oscar Ltd paid €1,800 for advertising on the local media.

On 8 May, the company was paid €9,750 for selling goods on a sales commission basis. Oscar Ltd received an electricity bill on 14 May to be paid in 30 days for €900.

On 22 May, Oscar Ltd invoiced one of its clients for selling goods on commission for €11,300 to be paid in 30 days. On 24 May the company received a telephone bill for €480 to be paid by the end of May. On 31 May the company paid the workers their wages totalling €8,400 and Ms R Kramer withdrew cash from the company for €6,600.

b. Post the above journal entries to the proper ledger accounts (using where appropriate the accounts and balances from Problem 1).

c. Take a trial balance of the transactions posted to the ledger accounts of Oscar Ltd.

d. Record the depreciation for the end of May accounting period in the general journal and ledger accounts using the following data:

i. The building has a useful life of 25 years with no salvage value. A straight-line depreciation method is used by the company.

ii. The office furniture has a useful life of 10 years with no salvage value. A straight-line depreciation method is also used.

iii. The computer equipment has a useful life of 5 years with salvage value of €30. A straight-line depreciation method is also used.

e. Take an adjusted trial balance of the transactions posted to the ledger accounts of Oscar Ltd.

f. Prepare the following financial statements:

i. Income statement for period ending 31 May 20xx.

ii. Statement of changes to owner’s equity as at 31 May 20xx.

iii. Statement of cash flows for period ending 31 May 20xx.

iv. Statement of financial position as at 31 May 20xx.

Data from Exercises 1

Carry out the activities as required below.

Enter the following transactions in the general journal of Oscar Ltd. On 2 April, Ms. R. Kramer established an entity ‘Oscar Ltd’ with a cash investment of €260,000. On the 3 April, the established company purchased land for its office site for €77,000. Oscar Ltd also purchased a prefabricated building for the office site on 5 April for €144,000.

On 15 April, the management of Oscar Ltd sold part of its office site land to Smite Fast Foods plc for €30,000 to be paid within three months. Oscar Ltd purchased office furniture from Delta Furniture Ltd on 17 April for €18,000 and computer equipment from Ascot-It Ltd for €7,650 on 18 April. Both these transactions were purchased on credit.

On 22 April, Smite Fast Foods made a part payment of €5,500 for land purchased from Oscar Ltd. On 24 April, Oscar Ltd made a part payment of €9,000 to Delta Furniture Ltd for the office furniture and on 26 April, made a part payment of €4,000 to Ascot-It Ltd for the computer equipment.

Post the above journal entries to the proper ledger accounts.

Take a trial balance of the transactions posted to the ledger accounts.

Show the financial position of Oscar Ltd.