On 1 July 2018, Ronald Lim incorporated a private limited company, Kool Komfort Pte Ltd to provide, air-conditioner repairs and maintenance services.
The following are the transactions that occur during the first month of operations.
Jul 1 Lim received shares for investing $100,000 cash, a $80,000 van and a $8,000 service equipment.
Jul 3 The company hired Linda as a part-time office assistant for $150 per day, as needed and a service technician for $4,000 per month.
Jul 4 The company rented a furnished office and paid $4,500 cash for July’s rental and another $4,500 for the rental deposit which is refundable.
Jul 6 The company purchased $10,000 of supplies on credit from Bentto Ltd.
Jul 16 The company billed Merlion Property Services $5,000 for repairs done on its airconditioner system.
Jul 23 The company billed Merlion Property Services another $7,500 for services performed.
Jul 26 The company received $5,000 cash from Merlion Property Services as partial payment toward its account.
Jul 28 The company paid $10,000 cash for the purchases made on credit from Bentto Ltd.
Jul 29 The company paid $2,000 cash for advertisements published in the local newspaper.
Jul 29 The company paid $1,050 for Linda wages for seven days of work and $4,000 for the service technician’s salary of this month.
Required:
Identify and arrange the following asset, liability and equity titles in the accounting equation format as shown in Exhibit 1.7 (page 18 of the textbook): Cash, Accounts receivable, Supplies, Deposit, Van, Service Equipment, Accounts Payable, Share Capital, Revenue and Expenses.
- Use additions and subtractions within the table created to show the dollars effects for each transaction on the individual items of the accounting equation. It is not necessary to show new account balances after each transaction. Present the final total for each account and verify that the accounting equation is in balance.
- Determine the company’s net profit.
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