ITG Pte Ltd (ITG) is a company specialising in air-conditioner maintenance and servicing. It makes adjusting...

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ITG Pte Ltd ("ITG") is a company specialising in air-conditioner maintenance and servicing. It makes adjusting and closing entries every 31 December, which is the company's financial year-end. Unless otherwise stated, journal entries are made as and when transactions occurred. ITG Pte Ltd Trial Balance 31 December 20X3 Debit Credit Account Title $ $ Cash 232,390 Accounts receivable 56,300 Allowance for impairment of AR 2,000 Prepaid advertisement 18,000 Office supplies 3,000 Land 2,350,000 Building 3,200,000 Accumulated depreciation - building 192,000 Equipment 400,000 Accumulated depreciation - Equipment 144,000 Vehicles 300,000 Accumulated depreciation - vehicles 85,800 Share capital 4,000,000 Retained earnings 871,940 Revaluation surplus Bank Loan Unearned revenue 30,000 240,000 38,400 Accounts payable Service revenue Salary expense Interest expense Utilities expense 1,850 5,005,000 3,908,300 4,000 139,000 10,610,990 10,610,990 The following additional data are available to determine adjusting entries required for the financial year ending 31 December 20X3: (1) The 5-year bank loan of $240,000 the company took on 1 June 20X2 carries an annual interest of 4% payable annually at the end of the month of May. (2) The prepaid advertisement was to advertise the company services for 6 months in the local magazine, starting from the month of September. (3) The company adopted the following depreciation policy for its non-current assets: Useful life Building Equipment Vehicles 50 8 10 Residual value Nil 2% of cost $14,000 Method Straight-line Double-declining Straight-line (4) (5) (6) (7) The equipment was bought on 1 January 20X2. The company bought and paid for $29,000 amount of office supplies on 3 March 20X3. On 12 December 20X3, the company received a legal letter from an unhappy customer demanding a refund of $3,000 for unsatisfactory service. On 23 December 20X3, the company received news that one of its customers had filed for bankruptcy. The amount owing was $1,300. The company was hopeful that the amount could still be collected. The allowance for impairment on accounts receivable was determined to be 5% of the accounts receivable. (8) The valuation of the freehold land on 31 December 20X3 was $2,500,000. (9) (10) The Office supplies at year-end amounted to $4,100. A utility bill amounting to $9,900 was received on 29 December 20X3. (11) The company was tax-exempted for the financial year. Required: (a) (b) Analyse the transactions and apply the accrual basis of accounting to prepare the journal entries and the adjusting journal entries as required based on the additional data provided in points (1) to (11) above to aid in the preparation of the financial statements for ITG Pte Ltd. Dates, narratives and workings 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. (36 marks) After incorporating the necessary journal entries and adjusted journal entries, present: (i) The statement of comprehensive income of ITG Pte Ltd, for the year ending 20X3 and (ii) (7 marks) The statement of financial position of ITG Pte Ltd As at 31 December 20X3. (12 marks) ITG Pte Ltd ("ITG") is a company specialising in air-conditioner maintenance and servicing. It makes adjusting and closing entries every 31 December, which is the company's financial year-end. Unless otherwise stated, journal entries are made as and when transactions occurred. ITG Pte Ltd Trial Balance 31 December 20X3 Debit Credit Account Title $ $ Cash 232,390 Accounts receivable 56,300 Allowance for impairment of AR 2,000 Prepaid advertisement 18,000 Office supplies 3,000 Land 2,350,000 Building 3,200,000 Accumulated depreciation - building 192,000 Equipment 400,000 Accumulated depreciation - Equipment 144,000 Vehicles 300,000 Accumulated depreciation - vehicles 85,800 Share capital 4,000,000 Retained earnings 871,940 Revaluation surplus Bank Loan Unearned revenue 30,000 240,000 38,400 Accounts payable Service revenue Salary expense Interest expense Utilities expense 1,850 5,005,000 3,908,300 4,000 139,000 10,610,990 10,610,990 The following additional data are available to determine adjusting entries required for the financial year ending 31 December 20X3: (1) The 5-year bank loan of $240,000 the company took on 1 June 20X2 carries an annual interest of 4% payable annually at the end of the month of May. (2) The prepaid advertisement was to advertise the company services for 6 months in the local magazine, starting from the month of September. (3) The company adopted the following depreciation policy for its non-current assets: Useful life Building Equipment Vehicles 50 8 10 Residual value Nil 2% of cost $14,000 Method Straight-line Double-declining Straight-line (4) (5) (6) (7) The equipment was bought on 1 January 20X2. The company bought and paid for $29,000 amount of office supplies on 3 March 20X3. On 12 December 20X3, the company received a legal letter from an unhappy customer demanding a refund of $3,000 for unsatisfactory service. On 23 December 20X3, the company received news that one of its customers had filed for bankruptcy. The amount owing was $1,300. The company was hopeful that the amount could still be collected. The allowance for impairment on accounts receivable was determined to be 5% of the accounts receivable. (8) The valuation of the freehold land on 31 December 20X3 was $2,500,000. (9) (10) The Office supplies at year-end amounted to $4,100. A utility bill amounting to $9,900 was received on 29 December 20X3. (11) The company was tax-exempted for the financial year. Required: (a) (b) Analyse the transactions and apply the accrual basis of accounting to prepare the journal entries and the adjusting journal entries as required based on the additional data provided in points (1) to (11) above to aid in the preparation of the financial statements for ITG Pte Ltd. Dates, narratives and workings 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. (36 marks) After incorporating the necessary journal entries and adjusted journal entries, present: (i) The statement of comprehensive income of ITG Pte Ltd, for the year ending 20X3 and (ii) (7 marks) The statement of financial position of ITG Pte Ltd As at 31 December 20X3. (12 marks)