Q1

The company adopted the following depreciation policy for its non-current assets:

Information:

Useful Life Residual Value

Building 40 Nil

Equipment 10 10% of cost price

On 1 December 20X2, the company sold an existing old equipment for $20,000. The equipment originally cost $80,000 and has a NBV of $22,400 as at 1 January 20X2. A new equipment was bought for $100,000 on the same day. The company issued shares to the equipment supplier for the purchase of the new equipment.

Working must be clearly shown for Journal Entries

On 13 December, the company purchased $6,500 worth of supplies. The company paid the supplier $1,000. The remaining amount will be paid the next month.

The bank loan of $500,000 the company took on 1 April carries an interest of 3% payable annually on 31 March.

A utility bill of $2,430 was received on 23 December.

On 24 December, the company completed a $4,500 job for a customer who had made the full payment last month.

On 27 December, a customer paid $3,000 for a job to be done next week.

Insurance cover for the building expires on 31 December 20X2 and the company paid $1,920 on 28 December 20X2 to renew the coverage for another year.

Salaries for the month of December amounted to $31,000 and was fully paid.

The company pays corporate tax at the prevailing rate of 17% on its profit.

Required:

a)

Analyse the transactions and apply the accrual basis of accounting to prepare the journal entries and the adjusting journal entries for AirTech Pte Ltd for the year ending 20X2. Dates and narratives must be clearly shown.

The sequence and numbering system of the journal entries are to follow the order and number system given in the question.

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Answer rating: 100% (QA)

I will provide the journal entries for the given transactions and adjustments for AirTech Pte Ltd fo... View the full answer