Wan Chai Ltd is a small wholesaler of electronic components located near Hong Kong’s central business district. The firm has provided a year-end balance sheet at 30 June 2022 and a summary of all the transactions that occurred in the month of July 2022.

WAN CHAI LTD BALANCE SHEET AS AT 30 JUNE 2022

$

Current assets Cash 324 000 Accounts receivable 906 000 Inventory 1 332 000 Prepaid insurance 42 000 Prepaid rent 144 000 Total current assets 2 748 000 Noncurrent assets Buildings and equipment 3 240 000 Accumulated depreciation (804 000)

Total noncurrent assets 2 436 000 Total assets 5 184 000 Current liabilities Accounts payable 1 620 000 Accrued wages 264 000 Unearned revenue 348 000 Total current liabilities 2 232 000 Noncurrent liabilities Loan 1 200 000 Total noncurrent liabilities 1 200 000 Shareholders’ equity Share capital 1 420 000 Retained profits 332 000 Total shareholders’ equity 1 752 000 Total liabilities and shareholders’ equity 5 184 000 The transactions are as follows:

a Paid wages outstanding at the end of June.

b Made credit sales of $1 254 000. (The cost of those goods sold was $750 000.)

c Paid $1 020 000 to accounts payable.

d Purchased $480 000 inventory on credit.

e Paid cash for an annual insurance premium of $504 000 (12-month policy starting 1 August 2022).

f Received $1 680 000 from debtors.

g Made cash sales totalling $270 000. (The cost of those goods sold was $192 000.)

h Interest on the loan is at 10 per cent per annum and will be paid in September.

i The work related to unearned revenue was completed.

j Paid wages expense of $186 000 for July. Wages owing at the end of July are $60 000.

k Paid rent for August of $144 000. (Rent is payable monthly in advance, at $144 000 per month.)

l Paid administrative expenses, incurred during the month, of $126 000.
m Depreciation is calculated monthly at 20 per cent per annum for plant and equipment, based on cost.
n Commissions are determined on the last day of the month at $13 200. They will be paid next month.
o The company is owed $10 000 in interest from the bank at the end of July.
Using Wan Chai Ltd’s previous balance sheet as a starting point, prepare the following data for the month ending 31 July 2022:
1 journal entries and ledger accounts 2 post-adjustment trial balance 3 balance sheet and Income statement.