ITG Pte Ltd (ITG) is a company specialising in air-conditioner maintenance and servicing. It makes adjusting...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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. Account Title Cash Accounts receivable Allowance for impairment of AR Prepaid advertisement Office supplies Land Building Accumulated depreciation - building Equipment Accumulated depreciation - Equipment Vehicles Accumulated depreciation - vehicles Share capital Retained earnings Revaluation surplus Bank Loan Unearned revenue Accounts payable Service revenue Salary expense Interest expense Utilities expense ITG Pte Ltd Trial Balance 31 December 20X3 (2) Debit $ 232,390 56,300 18,000 3,000 2,350,000 3,200,000 400,000 300,000 3,908,300 4,000 139,000 10,610,990 Credit $ 2,000 192,000 144,000 85,800 4,000,000 871,940 30,000 240,000 38,400 1,850 5,005,000 10,610,990 The following additional data are available to determine adjusting entries required for the financial year ending 31 December 20X3: 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. The prepaid advertisement was to advertise the company services for 6 months in the local magazine, starting from the month of September. (a) (3) (b) (5) (9) (10) (11) Required: (7) The company adopted the following depreciation policy for its non-current assets: Building Equipment Vehicles Useful life 50 8 10 Residual value Nil 2% of cost $14,000 Method Straight-line Double-declining Straight-line The equipment was bought on 1 January 20X2. The company bought and paid for $29,000 amount of office supplies on 3 March 20X3. (6) 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. On 12 December 20X3, the company received a legal letter from an unhappy customer demanding a refund of $3,000 for unsatisfactory service. The allowance for impairment on accounts receivable was determined to be 5% of the accounts receivable. The valuation of the freehold land on 31 December 20X3 was $2,500,000. The Office supplies at year-end amounted to $4,100. A utility bill amounting to $9.900 was received on 29 December 20X3. The company was tax-exempted for the financial year. 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: (1) The statement of comprehensive income of ITG Pte Ltd, for the year ending 20X3 and (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. Account Title Cash Accounts receivable Allowance for impairment of AR Prepaid advertisement Office supplies Land Building Accumulated depreciation - building Equipment Accumulated depreciation - Equipment Vehicles Accumulated depreciation - vehicles Share capital Retained earnings Revaluation surplus Bank Loan Unearned revenue Accounts payable Service revenue Salary expense Interest expense Utilities expense ITG Pte Ltd Trial Balance 31 December 20X3 (2) Debit $ 232,390 56,300 18,000 3,000 2,350,000 3,200,000 400,000 300,000 3,908,300 4,000 139,000 10,610,990 Credit $ 2,000 192,000 144,000 85,800 4,000,000 871,940 30,000 240,000 38,400 1,850 5,005,000 10,610,990 The following additional data are available to determine adjusting entries required for the financial year ending 31 December 20X3: 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. The prepaid advertisement was to advertise the company services for 6 months in the local magazine, starting from the month of September. (a) (3) (b) (5) (9) (10) (11) Required: (7) The company adopted the following depreciation policy for its non-current assets: Building Equipment Vehicles Useful life 50 8 10 Residual value Nil 2% of cost $14,000 Method Straight-line Double-declining Straight-line The equipment was bought on 1 January 20X2. The company bought and paid for $29,000 amount of office supplies on 3 March 20X3. (6) 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. On 12 December 20X3, the company received a legal letter from an unhappy customer demanding a refund of $3,000 for unsatisfactory service. The allowance for impairment on accounts receivable was determined to be 5% of the accounts receivable. The valuation of the freehold land on 31 December 20X3 was $2,500,000. The Office supplies at year-end amounted to $4,100. A utility bill amounting to $9.900 was received on 29 December 20X3. The company was tax-exempted for the financial year. 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: (1) The statement of comprehensive income of ITG Pte Ltd, for the year ending 20X3 and (7 marks) The statement of financial position of ITG Pte Ltd As at 31 December 20X3. (12 marks)
Expert Answer:
Answer rating: 100% (QA)
To prepare the necessary journal entries and adjusted journal entries we need to analyze the transactions and apply the accrual basis of accounting based on the additional data provided Here are the j... View the full answer
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
Students also viewed these accounting questions
-
What do you think of how social media are influencing cultures around the world ?
-
You are thinking of purchasing a cumulative, convertible preferred share with a stated dividend of $1.85 per quarter. If you require a return of 9.5%, compounding quarterly, what is the maximum price...
-
The arc length of a segment of a parabola ABC is given by: Determine if and. B h A \C a a
-
I recently heard my neighbor discussing how one of our other neighbors lost his job. My neighbor assumed that the person who lost his job was probably lazy or not smart enough for the job, without...
-
In certain ranges of a piano keyboard, more than one string is tuned to the same note to provide extra loudness. For example, the note at 110 Hz has two strings at this frequency. If one string slips...
-
Phillip Morgan, the owner of Morgan Importing, makes periodic buying trips to various countries. During the trips, he keeps notes about the items he purchases and basic data about their shipments. He...
-
A person with no experience in fluid mechanics wants to estimate the friction factor for 1-in.-diameter galvanized iron pipe at a Reynolds number of 8,000 . The person stumbles across the simple...
-
Financial statements for Peachfield Corporation as well as additional information relevant to cash flows during the period follow. Additional information: 1. Office equipment was sold during the year...
-
A metallic sphere of diameter 5 cm is initially at a uniform temperature of 300oC. Suddenly the metal sphere is immersed in a fluid at 30oC. The convective heat transfer coefficient between the...
-
An oil company produces three brands of oils: Regular, Multi grade, and Supreme. Each brand of oil is composed of one or more of four crude stocks, each having a different viscosity index. The...
-
Write an essay in which you argue for or against on the comment below. Support and defend your argument by drawing on your reasoning ability and general experience. Physical punishment "works" in the...
-
Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a...
-
Given the following tax structure: Taxpayer Mae Pedro Salary $ 39,000 $ 47,000 Total tax $ 1,794 ??? Required: a. What is the minimum tax that Pedro should pay to make the tax structure vertically...
-
A researcher is investigating the impact of a firm's capital intensity on its labour productivity using data for the year 2014 for a sample of manufacturing firms from Germany, France, Sweden, Italy...
-
Presented below are the 2024 income statement and comparative balance sheets for Santana Industries. SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2024 ($ in thousands) Sales...
-
Given the nature of corporate financing and investment decisions, that focus on long-term operations is appropriate. In periods of rapid change where long-term outlooks are uncertain or in flux, a...
-
Advantages and Disadvantages of Job Costing
-
Classify each of the following as direct costs or indirect costs of operating the Pediatrics ward for children at the Cleveland Clinic: a. Wi-Fi covering the entire hospital campus b. Net cost of...
-
The French group Club Mditerrane is an active service provider in the leisure and hospitality field with, in particular, its rich network of all-inclusive resort hotels and villages. The statements...
-
Multiple Choice Question Select the right answer (only one possible answer unless otherwise stated). 1 Which category (ies) of transactions and events is (are) specified in IAS 18 rules guiding the...
-
The Electrolux Group (hereafter Electrolux) is a producer of home appliances and appliances for professional use, selling more than 40 million products to customers in 150 countries. The companys...
-
A circular loop of diameter \(150 \mathrm{~mm}\) is placed on a wooden table that makes angle of \(24.5^{\circ}\) with a uniform magnetic field. What must be the magnitude of the magnetic field if...
-
A square loop of side length \(1 \mathrm{~m}\) is placed on a wooden table in a uniform magnetic field of magnitude \(0.5 \mathrm{~T}\). The greatest magnetic flux through the loop is measured when...
-
An electron is moving at speed \(7.0 \times 10^{10} \mathrm{~m} / \mathrm{s}\) perpendicular to a uniform magnetic field of magnitude \(0.80 \mathrm{~T}\). (a) What is the diameter of the circular...
Study smarter with the SolutionInn App