You have been provided with the Unadjusted Trial Balance for Whiteley Ltd. as at June 30,...
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You have been provided with the Unadjusted Trial Balance for Whiteley Ltd. as at June 30, 2019. The company uses the periodic system for inventory management. All sales revenue is recorded on credit, no cash sales are made by the company. There are four (4) parts to this question including PART A: General Journal entries, PART B: Classified Income Statement, PART C: Equity ledger account closing balance calculation and PART D: Classified Balance sheet. ** 4 Account Share capital (960 000 shares fully paid) General reserve Retained earnings Revaluation surplus Current tax liability Accounts payable Debentures Bank overdraft (current) Other liabilities (current) Land Buildings Accumulated depreciation - buildings Office equipment Accumulated depreciation-office equip. Delivery vehicles Accounts receivable Allowance for Doubtful debts Inventory (1 July 2018) Investments Prepaid insurance Sales WHITELEY LTD Unadjusted Trial Balance as at 30 June 2019 Interest revenue Purchases Sales returns and allowances Purchases returns and allowances Freight inwards Freight outwards Wages expense Interest expense Advertising expense Income tax expense Administrative expenses Debit $480 000 828 000 192 000- 84 000 87 200 288 000 190 000 10 000 298 000+ 2 600+ 12 900 10 800 128 200 12 250 37 000 24 800 120 750 $2 806 500 Credit $960 000 260 000- 72 000 30 000 24 8004 60 300 450 000 36 000- 38 800 157 200 115 400 2 500 589 900+ 7 200+ 2 400 $2 806 500 Required: Prepare General Journal entries, including narrations, to record the following transactions in the template provided. Whiteley Ltd transactions during 2019/2020: ● An Account Receivable is to be written off as uncollectible for the amount of $2 036. Additional interest owing on debentures and bank overdraft was $12 150. The directors have decided to transfer $20 000 to the general reserve from retained earnings. Dividends of 15c per share were recommended. An interim dividend of $25 000 had been paid during the year and debited in the Retained earnings account. < The company issued 20 000 bonus shares valued at $1 each out of the revaluation surplus. H Whiteley Ltd end of financial year adjustments: • Depreciation to be recorded for the full year on buildings at the rate of 5% p.a., and on furniture at the rate of 10% p.a. + • Delivery vehicles were purchased on January 1, 2019. The units of production method is used for depreciation purposes based on kilometres travelled during an accounting period. Using the following information record the depreciation expense for 30 June, 2019. Delivery vehicles travelled 40 000 km s in the period since January 1. Cost Residual value Useful life 200 000 km s • Interest due on investments amounted to $12 000. • Prepaid insurance at the end of the year amounted to $3 000. . Record the estimated Bad debts expense of 0.5% for the year ending 30 June, 2019 based on the percentage of net credit sales method. (NB: All sales are on a credit basis). Note: No adjusting entry is made for beginning and ending inventory. Under the periodic inventory system, these items would be amended as part of closing entries. 4 2019 P June 30 Profit and loss e 2¹ 443 41 To Account Receivable Interest Expenses P To interest payable e Retained Earnings To General Reserve (Dividend 15c per share-960000 share 0.15 -144000 Less dividend already paid $25000-119000) Revaluation Surplus 84 000 8 000 To share Capital ܒܢ Depreciation To Accumulated Depreciation-Building Depreciation To Accumulated Depreciation-office equipment 1 Dr 2036 12150 119000 20000 41400 19200 Cre de 2036 12150 119000 He 2 20000 41400 de de 42 44 se 643 19200 24 443 t t tt Depreciation To Accumulated Depreciation-delivery Vehicles Interest Revenue ee Insurance Expense AP He To Interest Receivable Bad and doubtful debts Expense To Allowance for Doubtful debts (Being Allowance for Bad and Doubtful debts recognize) Net Sales Sales-Sales Return-587300 Bad debts-Net credit sales*0.5%-2937(Rounded of) P 1 To Prepaid Insurance P P P 15200 12000 7000 29374 15200 Be 7000 12000 He H 44 64 He 29374 He 44 42 P 44 te He He Required: Prepare a detailed classified Income Statement for Whiteley Ltd. as at June 30, 2019 taking into account the transactions recorded in Part A. < Inventory on hand after a physical stocktake at 30 June 2019 amounted to $398 000. 2 INCOME Sales Less: Sales returns and allowances Net sales Cost of sales: WHITELEY LTD Income Statemente for the year ended 30 June 2019 Beginning inventory Purchases Less: Purchases returns & allowances Freight inwards Ending inventory Cost of sales GROSS PROFIT Other income: Interest on investments EXPENSES Selling and distribution expenses Freight outwards Depreciation expense - delivery vehicles Advertising expense Wages expense Total selling and distribution expenses Administrative expenses: Administrative expenses Depreciation office equipment Depreciation buildings Insurance expense Total administrative expenses Finance expenses Interest on debentures and overdraft Bad debtse Total finance expenses TOTAL EXPENSES Profit before income taxe Income tax expense LOSSE 4 e 4 4 P + 4 6 + P 12 de 42 de $2 de de 42 de 442 42 de 12 HE You have been provided with the Unadjusted Trial Balance for Whiteley Ltd. as at June 30, 2019. The company uses the periodic system for inventory management. All sales revenue is recorded on credit, no cash sales are made by the company. There are four (4) parts to this question including PART A: General Journal entries, PART B: Classified Income Statement, PART C: Equity ledger account closing balance calculation and PART D: Classified Balance sheet. ** 4 Account Share capital (960 000 shares fully paid) General reserve Retained earnings Revaluation surplus Current tax liability Accounts payable Debentures Bank overdraft (current) Other liabilities (current) Land Buildings Accumulated depreciation - buildings Office equipment Accumulated depreciation-office equip. Delivery vehicles Accounts receivable Allowance for Doubtful debts Inventory (1 July 2018) Investments Prepaid insurance Sales WHITELEY LTD Unadjusted Trial Balance as at 30 June 2019 Interest revenue Purchases Sales returns and allowances Purchases returns and allowances Freight inwards Freight outwards Wages expense Interest expense Advertising expense Income tax expense Administrative expenses Debit $480 000 828 000 192 000- 84 000 87 200 288 000 190 000 10 000 298 000+ 2 600+ 12 900 10 800 128 200 12 250 37 000 24 800 120 750 $2 806 500 Credit $960 000 260 000- 72 000 30 000 24 8004 60 300 450 000 36 000- 38 800 157 200 115 400 2 500 589 900+ 7 200+ 2 400 $2 806 500 Required: Prepare General Journal entries, including narrations, to record the following transactions in the template provided. Whiteley Ltd transactions during 2019/2020: ● An Account Receivable is to be written off as uncollectible for the amount of $2 036. Additional interest owing on debentures and bank overdraft was $12 150. The directors have decided to transfer $20 000 to the general reserve from retained earnings. Dividends of 15c per share were recommended. An interim dividend of $25 000 had been paid during the year and debited in the Retained earnings account. < The company issued 20 000 bonus shares valued at $1 each out of the revaluation surplus. H Whiteley Ltd end of financial year adjustments: • Depreciation to be recorded for the full year on buildings at the rate of 5% p.a., and on furniture at the rate of 10% p.a. + • Delivery vehicles were purchased on January 1, 2019. The units of production method is used for depreciation purposes based on kilometres travelled during an accounting period. Using the following information record the depreciation expense for 30 June, 2019. Delivery vehicles travelled 40 000 km s in the period since January 1. Cost Residual value Useful life 200 000 km s • Interest due on investments amounted to $12 000. • Prepaid insurance at the end of the year amounted to $3 000. . Record the estimated Bad debts expense of 0.5% for the year ending 30 June, 2019 based on the percentage of net credit sales method. (NB: All sales are on a credit basis). Note: No adjusting entry is made for beginning and ending inventory. Under the periodic inventory system, these items would be amended as part of closing entries. 4 2019 P June 30 Profit and loss e 2¹ 443 41 To Account Receivable Interest Expenses P To interest payable e Retained Earnings To General Reserve (Dividend 15c per share-960000 share 0.15 -144000 Less dividend already paid $25000-119000) Revaluation Surplus 84 000 8 000 To share Capital ܒܢ Depreciation To Accumulated Depreciation-Building Depreciation To Accumulated Depreciation-office equipment 1 Dr 2036 12150 119000 20000 41400 19200 Cre de 2036 12150 119000 He 2 20000 41400 de de 42 44 se 643 19200 24 443 t t tt Depreciation To Accumulated Depreciation-delivery Vehicles Interest Revenue ee Insurance Expense AP He To Interest Receivable Bad and doubtful debts Expense To Allowance for Doubtful debts (Being Allowance for Bad and Doubtful debts recognize) Net Sales Sales-Sales Return-587300 Bad debts-Net credit sales*0.5%-2937(Rounded of) P 1 To Prepaid Insurance P P P 15200 12000 7000 29374 15200 Be 7000 12000 He H 44 64 He 29374 He 44 42 P 44 te He He Required: Prepare a detailed classified Income Statement for Whiteley Ltd. as at June 30, 2019 taking into account the transactions recorded in Part A. < Inventory on hand after a physical stocktake at 30 June 2019 amounted to $398 000. 2 INCOME Sales Less: Sales returns and allowances Net sales Cost of sales: WHITELEY LTD Income Statemente for the year ended 30 June 2019 Beginning inventory Purchases Less: Purchases returns & allowances Freight inwards Ending inventory Cost of sales GROSS PROFIT Other income: Interest on investments EXPENSES Selling and distribution expenses Freight outwards Depreciation expense - delivery vehicles Advertising expense Wages expense Total selling and distribution expenses Administrative expenses: Administrative expenses Depreciation office equipment Depreciation buildings Insurance expense Total administrative expenses Finance expenses Interest on debentures and overdraft Bad debtse Total finance expenses TOTAL EXPENSES Profit before income taxe Income tax expense LOSSE 4 e 4 4 P + 4 6 + P 12 de 42 de $2 de de 42 de 442 42 de 12 HE
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WHITELEY LTD Income Statement for the year ended June 30 2019 Descriptions INCOME Sales 589900 LessR... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting The Financial Chapters
ISBN: 978-0134486857
6th edition
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
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