South Shore Manufacturing Ltd had this balance sheet:

During July 2016, South Shore Manufacturing experienced the following transactions: 

a. An amount of $10 000 of the shareholders' loan was repaid, 

b. A customer paid one of the accounts receivable, $11 240. 

c. Additional inventory costing $5320 was purchased on credit, 

d. The company issued new shares for $22 000 cash.

e. The proceeds of the share issue were used to reduce the bank overdraft.
f. More land costing $52 000 was purchased for $12 000 cash plus a new long-term mortgage for the rest, 

g. More factory equipment costing $31 900 was purchased on credit, with $13 900 due in six months and the rest due in 24 months.

Required:
1. Prepare journal entries for each transaction.
2. Prepare a new balance sheet for the company as at 31 July 2016.

Transcribed Image Text:

Assets Current assets Cash Accounts receivable Inventories, cost Prepayments Noncurrent assets Land, cost Factory and equipment, cost Accumulated depreciation BALANCE SHEET AS AT 30 JUNE 2016 $ 24000 89 000 111 000 7000 231000 78 000 584000 (198 000) 386000 695 000 Liabilities and shareholders' equity Current liabilities Bank overdraft Accounts payable Taxes payable Current part of mortgage Noncurrent liabilities Mortgage, less current Employee entitlements Loan from shareholders Shareholders' equity Share capital Retained profits 53 000 78 000 13 000 18000 162 000 214000 66 000 100 000 380 000 55 000 98 000 153 000 695 000