Steven Loh started High5 Training Pte Ltd in 2021. The company provides motivational courses for the small and medium enterprises in Singapore. All its revenue is derived from fees earned from the courses that it has conducted.

Steven approached you for help to finalise the company's accounts for the year ending 31 Dec 2022.

Below is the unadjusted trial balance.

You are given the following additional information none of which has been taken into consideration in arriving at the figures shown in the trial balance above.

Analyse the information given below and prepare all necessary adjusting entries. Show narrations and all workings.

(i) On 1 July, Steven Loh sold a computer that costs $1,800, with accumulated depreciation of $400 as at 31 Dec 2021 for cash of $800. He deposited the cash into his personal bank account but forgot to inform the accounts clerk of this transaction.

Both the cost and the accumulated depreciation of the computer sold were included in the amount shown for computers at cost and the accumulated depreciation for computers in the unadjusted trial balance above. The residual value of the computer sold was originally estimated to be $200.

(ii) On 30 November, the directors unanimously vote to pay a cash dividend of $0.02 per share on 31 January 2023 to its shareholders on record on 15 December.

(iii) On 16 December, the company was notified that one of its clients who owed $1,800 has gone bankrupt. The company uses the allowance method to account for bad debts.

(iv) The 31 Dec 2022 inventory count of supplies showed $22,300 was still available.

(v) Nine months have expired since the 12-month insurance was paid in advance.

(vi) No depreciation has been charged for the year ended 31 Dec 2022.

The company depreciates non-current assets as follows:

Computers at cost - straight line over 4 years. The residual value of the computers reflected in the unadjusted trial balance was estimated to be $4,000.

Office equipment - the double declining balance method. Office equipment are assumed to have useful life of 5 years and residual value at 10% of the cost. (I don't know how to do this part, please explain the calculation as well)

(vii) On 31 December, the amount of paid in advance by clients for courses to be conducted was $9,250. However, these have been included in revenue in the unadjusted Trial Balance.

(viii) It was estimated that 5% of outstanding accounts receivable on 31 December were uncollectible.
 

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Account title Share capital (100,000 shares at $1.00 each) Retained earnings, 31 Dec 2021 Computers at cost Office equipment at cost Accumulated depreciation - Computers - Office equipment Prepaid insurance Supplies Rental expense Insurance expense Revenue General expenses Wages and salaries Supplies expense Repair and maintenance expense Interest and bank charges Allowance for doubtful debts Accounts receivable Accounts payable Bank Debit ($) Credit ($) 100,000 13,810 36,000 20,000 6,000 61,730 48,000 13,500 10,180 50,700 11,910 5,050 440 65,300 53,780 382,590 8,000 8,000 239,380 900 12,500 382,590 Account title Share capital (100,000 shares at $1.00 each) Retained earnings, 31 Dec 2021 Computers at cost Office equipment at cost Accumulated depreciation - Computers - Office equipment Prepaid insurance Supplies Rental expense Insurance expense Revenue General expenses Wages and salaries Supplies expense Repair and maintenance expense Interest and bank charges Allowance for doubtful debts Accounts receivable Accounts payable Bank Debit ($) Credit ($) 100,000 13,810 36,000 20,000 6,000 61,730 48,000 13,500 10,180 50,700 11,910 5,050 440 65,300 53,780 382,590 8,000 8,000 239,380 900 12,500 382,590