ABC company is buying and selling strollers as a wholesaler. The following events took place in 2019 as below. 1. ABC Company is founded by Murat Demireller on 01.12.2019 with the equity of 1.000.000 TL. This amount is paid by the partner via banks at the same date. 2. The company borrowed 3.600.000 TL from Halkbank on 01.12.2019. The loan matures on 30.11.2020, with an annual interest expense of 360.000 TL. The principal and interest will be paid on 30.11.2020. 3. The company rented a store for 5 years on 01.12.2019. Total of the rental cost is 1.475.000 TL including VAT and the company paid the rent in advance via banks on 01.01.2019. 4. At the same date, the company hired a construction company to paint the walls and change the floor for 141.600 TL including VAT. The construction company completed all the tasks at the same date and was paid via banks. 5. The company sealed a deal with a local company to advertise its brand on the walls of the stores for 6 months. The advertisement service started on 01.12.2019 and ended on 30.05.2020. 30.000 TL Excluding VAT is paid in advance by cash. 6. The company bought a store at Gimat for 1.600.000 excluding VAT on 01.12.2019. The cost of the store is paid from bank accounts. The useful life of the store is 40 years. 7. The company insured its stores with the inventory for 1 year on 01.11.2019. The premium of the 1-year insurance plan is 240.000 TL and is paid by the company at the same date on 01.11.2020. 8. The transactions associated with the inventory have occurred during the year as in the table below. The prices above exclude VAT. Unit Date Transaction 01.12.2019 Purchases Amount (number) Price 12.12.2019 Sales 13.12.2019 Purchases 30.12.2019 Sales 180 ISO 200 200 (TL) 420 $50 450 600 All payments placed in the table are made via banks. You are required to, a. Book the journal entries, only for the year of 2019, for each transaction including the opening records in the general journal. Booking the records to the ledgers is not obligatory. However, it is strongly encouraged to book the recordings to the ledgers so that you can track the numbers in a correct way. (45 Points) b. Book the inventory and closing records in the general journal on 31.12.2019. Booking the records to the ledgers is not obligatory. However, it is strongly encouraged to book the recordings to the ledgers so that you can track the numbers in a correct way. (45 Points) c. Prepare income statement of 2019 term on 31.12.2019. (10 Points) Note: The company uses FIFO inventory method under periodic inventory system. The company uses the straight line amortisation method with the indirect deduction. - VAT rate is %18. - Corporate tax rate is %22. Good Luck
