b The following adjustments are required before preparation of Singapore Ltds

B the following adjustments are required before

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(b) The following adjustments are required before preparation of Singapore Ltd’s financial statements for the year: (i) Depreciation to be provided on a straight-line basis on buildings at 5% p.a. and on office furniture and equipment at 10% p.a. The sale of office furniture occurred at the beginning of the current financial year. (ii) Goodwill is considered not to be impaired. (iii) Management was informed that a particular debtor had become bankrupt and the full account of $12 000 needs to be written off. (iv) The Allowance for Doubtful Debts account needs to be adjusted to 8% of accounts receivable, afer considering the adjustment in item iii above. (v) Current income tax expense (and tax liability) for the year is estimated to be $8000. (vi) Accrued wages to staff: sales $1500, administrative $2000. (vii) Vehicle rental paid in advance at 30 June 2017 amounted to $30 000. (viii) Shares with calls in arrears are to be forfeited, any reserve being retained by the company. (ix) A dividend of 3c per share is declared on shares remaining afer considering item viii. (x) Land is to be revalued upwards to its fair value of $250 000. (xi) Transfer $10 000 from the general reserve to retained earnings. Required A. Prepare the journal entries (in general journal form) required by items i to xi above. B. Prepare the adjusted trial balance as at 30 June 2017. C. Prepare the statement of profit or loss and other comprehensive income with expenses classified by function for Singapore Ltd for the year ended 30 June 2017. D. Prepare the statement of changes in equity for the year. E. Prepare the company’s statement of financial position as at 30 June 2017. A . General Journal 2017 June 30 Depreciation Expense – Buildings Dr 50 000 Accumulated Depreciation – Buildings Cr 50 000 (Depreciation at 5% per annum) 30 Depreciation Expense – Furniture & Equip. Dr 12 700 Accumulated Depreciation – F & E Cr 12 700 (Depreciation at 10% per annum) 30 Allowance for Doubtful Debts Dr 12 000 Accounts Receivable Cr 12 000 (Bad debts written off) 30 Bad Debts Expense Dr 14 372 Allowance for Doubtful Debts Cr 14 372 (Recognition of allowance at 8% of receivables) 17
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ACCY201 Financial Accounting IIB Spring Session 2016 Tutorial Solutions Week 5 8% x (225 400 – 12 000) – (14 700 – 12 000) 30 Income Tax Expense Dr 8 000 Current Tax Liability Cr 8 000 (Income tax expense) 30 Salaries Expense – Sales Staff Dr 1 500 Wages & Salaries Payable Cr 1 500 (Accrued salaries of sales staff) 30 Administrative Wages Expense Dr 2 000 Wages & Salaries Payable Cr 2 000 (Accrued wages of admin. staff) 30 Prepaid Rent Dr 30 000 Vehicle Rental Expense Cr 30 000 (Rent prepaid) 30 Share Capital Dr 8 000 Call Cr 2 000 Forfeited Shares Reserve Cr 6 000 (Forfeiture of 8 000 shares) 30 Retained Earnings/Dividend Declared Dr 33 960 Dividend Payable Cr 33 960 (Dividend of 3c on 1 132 000 shares) June 30 Land Dr 20 000 Gain on revaluation of land (OCI) Cr 20 000 (Recognition of other comprehensive income on revaluation of land) 30 Income tax expense (OCI) Cr 6 000 Deferred tax liability Dr 6 000 (tax effect of land revaluation) 30 Gain on revaluation of land (OCI) Dr 20 000 Income tax expense (OCI) Cr 6 000 Revaluation Surplus Cr 14 000
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  • Three '09
  • KEVIN
  • Financial Accounting, 1966, 1971, 1973, 1965, 1978, Financial Accounting IIB

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