1- Please calculate what amount should be the Capital Account in order to have balanced sheet of YOUR COMPANY. (5 points) BALANCE SHEET of YOUR COMPANY as 1.7.2021 ASSETS LIABILITY 100 Cash 199.000 129 Provision for Doubtful Trade 177.000 102 Bank 975.000 2.850.000 300. Bank loans 101 Cheques received 110 Common Stock 250.000 33.000 875.000 128 Doubtful Trade Receiveable 153 Inventory 100.000 535.000 320 Account Payable 177.000 321 Cheques given 384.000 370. Provisions for tax.. relating to the previous period 0 500 Capital 30.000 360 VAT Payable .000 157 Other Stock 180 Prepaid Expenses 130.000 193 Deferred (Comp) Income 255 Office Supplies 254 Motor Vehicle 255 Furniture 250 Land 260 Rights 257 Accum. Depreciation TOTAL 0 570 Retained Earning 3.750.000 15.000 690 Net Profit after tax 300.000 60.000 Total 36.000 The Remaining balance of the Prepaid Expenses: 30.000 400.000 (for rent 20.000 and for insurance:10.000) 330.000 Accumulated Depreciation: 64.750 -64750 (for MV-23.750 for furniture:19.000 for rigts: 22.000) Note: Inventory (96 x 4.000=384.000); Company is using WAC method for Inventory Calculation. YOUR COMPANY is buying and selling strollers. The following events took place in July 2021. And assume that each month is considered as a fical year. (VAT rate is % 18, company income tax rate is 25%.) 1-Firstly, V.A.T payable has been paid to the relevant tax office by using cash. 2- Company Tax has been paid to the tax office by using cash. 3- Net profit belongs to previous period (June 2021) transferred to the retained earnings. 4- Remember, the company rented a working place from Gimat Management on 1 January 2021, and paid twelve 12 months' rent 48.000 TL. 5- Remember, the company insured its properties, effective from 1 January to 31 December 2021, and paid an insurance premium of 24.000TL for the whole period of insurance. 6- The company rented its land out to a constructing firm in return to 48.000 TL for 1 year, starting from 01.06.2021 to 01.06.2022. Contract amount for the second month (July-2021) paid by cash to your company at 05/07/2021. (according to Turkish Tax Law, rental income is considered as revenue at the time received.) 7- A few checks received (2.750.000 TL) from the customer collected via Garanti Bank. 8. The Given (500.000TL) cheque to the whole-seller were paid by using bank account. 9-The company purchased 5.000 strollers from The wholeseller for 480.000 TL(tax excluded) and made expense for transportation 10.000 TL (tax excluded). Transportation expense and its VAtax were paid in cash (11.800.-TL). Cost of strollers including VAT would be paid later. (Company gave a cheque for 566.400TL) 10 While carrying the strollers in to storage area &00 strollers (& = the first digit of your province plate number) were smashed because of mismovement of liftholder. After this accident, the company applied to the tax office. Valuation Commission decided that the value of the machisted strollera decreased from the chased cost og TT to 10 10- While carrying the strollers in to storage area &00 strollers (& = the first digit of your province plate number') were smashed because of mismovement of liftholder, After this accident, the company applied to the tax office. Valuation Commission decided that the value of the each rusted strollers are decreased from (the purchased cost) 98 TL to 10 TL. The company charged off the amount those strollers from inventory to the Other Stocks and decided to separate provision for that impairment. 11- The Company sold 7.000 strollers for 980.000TL for which 380.000 TL was taken in cash. After deducting cash payment from the sales amount, the rest including VAT would be paid later. (Company received a cheque 776.400 TL) The company uses WAC method for Inventory 12. The company has decided to distribute 2.000.000.- TL from the retained earning after reserving legal requirements (%5 of the retained earning amount to be distributed) to the share holders (You(%50) and Xavier (%50) end of the year (July) 2021. According to Turkish tax law, the amount to be distributed-divident is subject to (10%) withholding tax. 12/A. Divident amounts to be payable after withholding taxes has been paid to the saherholders by using Bank account and witholded income tax has been paid to the tax office by using cash. 13- Remember, the company paid interest expense of 7.000 TL and made instalment payment 50.000 TL for its bank loan. (They were paid by cash at the end of July) 14- At the end of July, the company paid salaries of 25.000TL to various employees. 15. During July, the company bought some fuel for its motor vehicle, and paid telephone, electric and water bills (Tax included) 8.850TL. (Paid by cash) 16- Remember that, if, 391.VAT calculated >191.Deductible VAT + 190. Deferred VAT; 360 VAT payable = 391.VAT calculated - 191.Deductible VAT - 190. Deferred VAT If, 191.Deductible VAT > 391. VAT calculated: 190. (Transferred)Deferred VAT=191.Deductible VAT - 391. VAT calculated 17- Useful life for truck is 4 years, for furniture is 3 years and for rights is 5 years. Accm depr: for MV:23.750, for furn:19.000 for rights:22.000 Required: 1-Prepare the journal entries (including boot and closing recording) in the general journal and post them to the ledger - It is not necessary to prepare trial balance (75 points) 2-Prepare Income Table (5 points) and Cash Flow Statement -(Used Direct Method)- Cheques Received and Cheques Given can be accepted as cash flow even changes in the Bank Account can be accepted as cash flow. (15 points)
