The following unadjusted trial balance is available for Si’s Knitting Service Ltd.:
Si’s Knitting Service Ltd
Unadjusted Trial Balance
30th June, 2015
|
Cash |
54,680 |
|
|
Accounts Receivable |
193,000 |
|
|
Prepaid Insurance |
36,000 |
|
|
Buildings |
80,000 |
|
|
Accumulated Depreciation – Buildings |
43,200 |
|
|
Machinery |
480,000 |
|
|
Accumulated Depreciation – Machinery |
225,000 |
|
|
Land |
400,000 |
|
|
Accounts Payable |
65,760 |
|
|
Notes Payable |
100,000 |
|
|
Interest Payable |
9,000 |
|
|
Customer deposits |
12,000 |
|
|
Bank Loan |
110,000 |
|
|
Ordinary Shares |
460,000 |
|
|
Retained Earnings |
80,940 |
|
|
Revenue |
576,340 |
|
|
Cost of goods sold |
245,000 | |
|
Utilities expense |
14,660 |
|
|
Maintenance expense |
48,300 |
|
|
Interest Expense |
4,500 |
|
|
Salaries expense |
86,100 |
|
|
Interim Dividends |
40,000 |
|
|
1,682,240 |
1,682,240 |
Additional Information:
(i) Prepaid insurance represents the cost of a 24 month policy purchased on 1st July, 2014.
(ii) The buildings have an estimated useful life of 20 years and an estimated salvage value of $10,000.
(iii) The machinery has an estimated useful life of 6 years and an estimated salvage value of $30,000.
(iv) The notes payable were signed on 1st January, 2015. The principal and interest are due for repayment on 31st December, 2015. Interest is charged at 9% pa.
(v) The Customer deposits represent amounts paid in advance by new customers. A total of $6,000 of the balance in the account was earned during June, 2015.
(vi) Salaries earned by employees as at the end of June but not yet paid total $16,000.
(vii) The bank loan is due for repayment on 31st December, 2017. Interest is charged at 7½% pa and is payable on 30th June of each year.
(viii) The company income tax rate is 30%.
(ix) The company’s directors decide to pay a final cash dividend of 11,500.
(x) The directors transfer $30,000 to a general reserve.
(xi) The company revalue it land upwards by 200,000
Required:
(a) Prepare necessary adjustment journal entries.
(b) Prepare a set of financial reports for the external users according to AASB 101 and other relevant accounting standards
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