Q. 1
Kargil P/L began operations and completed the following transactions during July 2018 as follows:
| July | 1 | Sold ordinary shares for cash for $25,000 |
| 2 | Set up a petty cash for $200, to be managed by the receptionist. | |
| 2 | Paid quarterly office rent, $3,300 | |
| 3 | Paid cash for office computers, $4,400. This equipment is expected to remain in service for 5 years. | |
| 3 | Employed a full-time draftsman at the rate of $800 per fortnight. | |
| 3 | Purchased milk, coffee, sugar, tissues etc for office amenities for $49.25. This total amount included GST of $13.74. | |
| 4 | Purchased office furniture on credit for $3,960. The furniture should last for 7 years. | |
| 4 | Purchased supplies on credit, $990, terms 2/20 net 30 | |
| 9 | Performed Design services for a client on credit, $2,420 terms 1/20, net 30 | |
| 18 | Paid electricity bill for the period July 1-15, $275 | |
| 18 | Paid wages $800 to the draftsman for the fortnight ending July 17 | |
| 21 | Received $1,980 advance from a client for job to be performed in September 2018. | |
| 22 | Hired a secretary to be paid $2,055 on the 20th of each month. The secretary began work immediately. | |
| 23 | Performed service for a client & received cash of $4,400 | |
| 24 | Paid for supplies purchased on July 4th | |
| 28 | Received $1,197.90 on account. |
Additional Information:
- Kargil P/L is registered for GST.
- Depreciation on office equipment & furniture is calculated using straight line depreciation. The residual value of computers is nil. The residual value of furniture is $100 (excl GST).
- Petty cash is reimbursed on the last day of each month.
- Supplies inventory on hand at the end of the month was $370.
Required:
- Journalise the transactions from 1-28 July as shown in the table above. (Marks: 20)
- Prepare a worksheet showing unadjusted trial balance. (Marks: 7)
- Use the worksheet to prepare adjusted trial balance. Clearly show the adjustments, if any, directly on the worksheet. (Marks: 18)
- Prepare T accounts for Service Revenue, GST Clearing & Cash. (Marks :5)
- Prepare income statement for the month of July 2018 based on c) above. (Marks: 5)
- Prepare statement of changes in Retained Earnings. (Marks: 3)
- Prepare balance sheet as at 31/7/2018. (Marks:7)
Note: Show your calculations clearly where applicable.
Q.2
Brisbane Ltd. has the following balances at the end of June 2018:
| Account | Balance $ |
| Cash | 15,800 |
| Supplies | 2,000 |
| Prepaid Rent | 900 |
| Equipment | 49,000 |
| Accumulated Depreciation | 5,500 |
| Accounts Payable | 4,500 |
| Salary Payable | 500 |
| Unearned Service Revenue | 5,100 |
| Long Term Loan Payable | 4,400 |
| Share Capital | 30,000 |
| Retained Earnings | 6,500 |
| Dividend | 1,100 |
| Service Revenue | 18,100 |
| Salary Expense | 3,000 |
| Rent Expense | 1,500 |
| Depreciation Expense | 300 |
| Supplies Expense | 400 |
| Utilities Expense | 600 |
Required:
- Prepare classified balance sheet for Brisbane Ltd. as at 30.6.18.
- Journalise any required closing entries for the company.
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