Swansea Ltd prepared the unadjusted trial balance as at 30 June 2016. The following information and events
Question:
Swansea Ltd prepared the unadjusted trial balance as at 30 June 2016.
The following information and events are yet to be recorded by the company on 30 June 2016.
1. Inventory on hand after a physical stocktake at 30 June 2016 amounted to $265 000.
2. Prepaid insurance at the end of the year amounted to $3000.
3. Wages accrued and unpaid were $1700.
4. Interest owing and unrecorded on debentures and bank overdraft was $15 000.
5. Depreciation to be recorded on delivery vehicles at the rate of 20% p.a., on buildings at the rate of 5% p.a., and on furniture at the rate of 10% p.a. All these assets have been on hand throughout the year.
6. Interest due on investments amounted to $6000.
7. Sales made on the last day of the financial year but not recorded were for $8000.
8. The directors have decided to transfer $20 000 to the general reserve from retained earnings.
9. Dividends of 5c per share were recommended. An interim dividend of $35 000 had been paid during the year, and this dividend had been debited to the Retained Earnings account.
10. The company issued 30 000 bonus shares valued at $1 each out of the revaluation surplus.
Swansea LTD Unadjusted Trial Balance as at 30 June 2016 | ||||||||
Account | Debit | Credit | ||||||
Share capital (700000 shares fully paid) General reserve Retained earnings Revaluation surplus Current tax liability Accounts payable Debentures Bank overdraft (current) Other liabilities (current) Land Buildings Accum. depr. – buildings Furniture and equipment Accum. depr. – furniture and equipment Delivery vehicles Accum. depr. – delivery vehicles Accounts receivable Inventory (1 July 2015) Investments Prepaid insurance Sales Purchases Sales returns and allowances Purchases returns and allowances Freight inwards Freight outwards Wages expense Discount allowed Discount received Interest expense Advertising expense Income tax expense Administrative expenses | $ 400000 620000 160000 60400 60600 240000 200000 10000 240000 2080 10080 9060 100500 3050 10140 30700 20800 100710 | $ 700000 200000 80000 30400 20800 50300 400000 30700 30300 100000 80000 20000 530600 2000 3020 | ||||||
$2278120 | $2278120 | |||||||
Required
A. Prepare the adjusting entries necessary.
B. Prepare a detailed income statement for Swansea Ltd for the year ended 30 June 2016.
C. Prepare the statement of changes in equity for Swansea Ltd for the year ended 30 June 2016.
D. Prepare the balance sheet for Swansea Ltd as at 30 June 2016.
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Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett