CANBERRA LTD BALANCE SHEET AS AT 31 DECEMBER 2020

$ $

Assets Liabilities Current assets Current liabilities Cash 21 000 Accounts payable 27 000 Accounts receivable 39 000 Unearned revenue 32 000 Inventory 40 000 Total current liabilities 59 000 Prepaid rent 11 000 Total current assets 111 000 Noncurrent liabilities Long-term debt 0 Noncurrent assets Total noncurrent liabilities 0 Land 100 000 Total liabilities 59 000 Property and equipment 400 000 Net assets 562 000 Accumulated depreciation (80 000)

Intangible assets (net) 90 000 Shareholders’ equity Total noncurrent assets 510 000 Share capital 520 000 Retained profits 42 000 Total assets 621 000 Total shareholders’ equity 562 000 The following transactions occurred for Canberra Ltd in 2021:

a Issued share capital for $200 000 cash.

b Purchased $35 000 of inventory on credit.

c Paid $28 000 to accounts payable.

d Sold inventory costing $60 000 for $270 000. All sales are on credit.

e Collected $52 000 from customers.

f Prepaid $12 000 rent for the year commencing 1 January 2022.

g Depreciated property and equipment for the year using the straight-line method (20 per cent per annum).

h Dividends declared and paid totalled $30 000.

i Borrowed $100 000 on 1 July 2021. The loan is due on 30 June 2022 and carries a 10 per cent p.a. interest rate. Paid $4000 interest on this loan during 2021.

j On 1 November paid $24 000 for an insurance policy covering 1 November 2020 to 31 October 2021.

k Paid wages of $90 000; wages of $20 000 had been earned but not paid.

l Received interest of $5000 in cash from the bank.

On 31 December 2021:

m The unearned revenue account had a balance of $5000.

n Accrued interest revenue had a balance of $2000.

Required:

1 Prepare journal entries for the transactions.

2 Prepare ledgers.

3 Prepare closing entries.

4 Prepare a 10-column worksheet.

5 Prepare an income statement and balance sheet for Canberra Ltd for the year ended 31 December 2021.