Define inventory and state various methods that can be used for valuation of inventory with the

help of suitable example. $[5$ marks$]$ Q$-4-$ Edmund Fox opened Fox Corporation Ltd$.$ as on January $1,2024$ which deals in car rentals,

repairs and service. On January $31,2024$ the trial balance is as follows:

Fox Corporation Ltd$.$

Trial Balance as on January$31,2024$ Debit

$$10950$

$$3600$

$$850$

$$28000$

$$650$ $$400$

Credit

$$20000$

$$450$

$$4200$

$$18000$

$$1800$

$$44,450$

Particulars

Cash

Prepaid Insurance Supplies Equipment

Notes Payable Accounts Payable Unearned Revenue Fox$$s Capital Fox$$s Drawings Service Revenue Rent Expense Total

$1.$ Prepaid insurance is the cost of a $12-$month insurance policy that started at January$1,2024.$

$2.$ Supplies costing $$225$ were in hand on January $30,2024.$

$3.$ The equipment is expected to have a useful life of four years.

$4.$ The note payable is dated January$1,2024.$ It is a six$-$month,$4\%$ with interest payable on the

first of each month staring February$1,2024.$

$5.$ Seven customers paid for the company$$s six$-$month service package costing $$600,$ at the

beginning of the month i$.$e$.$ January $1,2024.$ These customers were served for the month of

January.

$6.$ Car repair services performed for other customers but not billed or recorded as on January

$31,2024$ total $$1500.$

Using the above information:

$1.$ a$)$ Prepare Adjusted Trial Balance as on January $31,2024$

$2.$ b$)$ Prepare an income statement, statement of owner$$s equity and Balance Sheet.

Answer rating: 100% (QA)

Okay lets solve this step by step 1a Adjusted Trial Balance of Fox Corporation Ltd as on January 31 ... View the full answer