The transactions below have occurred during the year ended 30 June 2020 but have not been recorded:
Question:
The transactions below have occurred during the year ended 30 June 2020 but have not been recorded:
1- RM 3,400 of other income has been earned in May 2020 but has not been recorded.
2- At the year end, income tax expense RM1,440 has not been recorded as it has not been paid yet.
3- RM 12,000 of the unearned sales revenue has been earned at, 30 June 2020.
4- The bank loan was taken on 1 September 2019. Finance cost on the bank loan is accrued at, 30 June 2020.
5- Property, plant and equipment consists of the following:
Cost
Accumulated Depreciation
RM
RM
Freehold land
420,000
-
Building
400,000
152,000
Machinery
388,000
169,600
1,208,000
328,000
The building is depreciated on straight line basis over its estimated useful life of 50 years. The building is expected to have a scrap value of RM80,000.
The machinery is depreciated using diminishing balance method of 20% on book value.
Depreciation of building is an administrative expense while depreciation of machinery is included in cost of sales.
In June 2020, the company acquired a franchise for RM60,000. In addition, the company incurred legal fee of RM2,400 during the acquisition. Both are paid by cash but are unrecorded at year end. The estimated useful life of the franchise is 12 years. Amortisation of the franchise is calculated on a yearly basis and is included in cost of sales.
Required:
Prepare journal entries to record the above adjusting entries.
Prepare a statement of profit or loss and other comprehensive income and a statement of changes of equity for the year ended 30 June 2020, and a statement of financial position as at that date.
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott