Covi Pte Ltd (CPL) is in the business of providing consultation services and makes adjusting and closing entries every year-end. Unless otherwise stated, journal entries are made as and when transactions occur. 31 December is the company's year-end.

The companys accounts as at 30 November 20X9 are as follows:

You are the accountant for CPL and the following data are made available to you to determine necessary and adjusting entries for the year ending 31 December 20X9. Please read the data below in conjunction with the trial balance provided above.

(1) During December 20X9, CPL performed work amounting to $16,800 on credit, which they have billed but not yet recorded.

(2) In November 20X9, the company had received $12,000 cash in advance from a client, TP Co., for consultation services to be provided over 3 months starting from 1 December 20X9. There was no other cash advance. In December 20X9, an estimated 25% of the services was provided for TP Co.

(3) CPL prepaid rent for the rental of its sole office space on 1 September 20X9 for a 12-month period starting 1 September 20X9. Prior to that, the company had paid rent on a monthly basis. The rental expenses for the financial year up till 31 August 20X9 was $46,800.

(4) The amount of salaries per month remained constant during the year 20X9. The employees have been paid their salaries every month-end, and their December salaries were also paid punctually on 31 December 20X9. The company announced that the employees would be paid a total bonus of $8,000 for their hard work in 20X9, but the bonus would be paid only after year-end. Both the salaries for December 20X9 and the bonuses declared have yet to be recorded.

(5) During December, the company incurred and paid $1,200 for administrative expenses in cash. This transaction has yet to be recorded

(6) On 3 December 20X9, CPL bought $2,500 worth of supplies on credit. There were $10,200 of supplies on hand as at 31 December 20X9. The necessary journal entry (entries) has (have) not been recorded.

(7) CPL accounts for a likely impairment of accounts receivables by estimating the lifetime expected credit losses on the companys accounts receivables as at year-end using a provision matrix and making any necessary adjustment to the Allowance for Impairment of Accounts Receivable account. CPL did an aging analysis and estimated that $3,610 out of the total accounts receivables as at 31 December 20X9 is likely to be uncollectible. There is no accounts receivable where CPL deems to have no reasonable expectation of collecting the contractual cash flows, i.e. there is no write-off of accounts receivables during the year.

(8) The company depreciates equipment using the double-declining method. The estimated useful life of the equipment is 8 years and its estimated residual value is $3,000. The current equipment was purchased sometime in 20X8 and there was no disposal during 20X9. CPL has not performed the depreciation of the equipment for 20X9.

(9) Assume no taxes.

Question:

(a) Analysing the above information, apply and illustrate accrual accounting concepts and prepare all necessary and adjusting journal entries (journal narratives and dates NOT required) made during December 20X9 and adjusting entries made on 31 December 20X9. Please show all workings clearly to get full credit.

(b) Report the performance of the firm by preparing the Statement of Comprehensive Income, presented in a single-statement format, for the year ended 31 December 20X9.

(c) Prepare the necessary closing entries (journal narratives NOT required) to prepare the books for the coming new financial year.

(d) Report the financial position of the firm by preparing the Statement of Financial Position as at 31 December 20X9.

Account Names Cash Accounts receivable Allowance for impairment of accounts receivable Supplies Prepaid rent Equipment Accumulated depreciation - equipment Accounts payable Unearned revenue Share capital Retained earnings Dividend distributed Consultation fees earned Salary expense Advertising expense Depreciation expense Rent expense Supplies expense Impairment loss on accounts receivable Administrative expense Dr Cr $ $ 100,800 48,540 3,170 13,380 61,200 31,980 2,400 19,600 12,000 108,000 71,115 3,380 237,800 120,450 9,720 0 46,800 10,620 0 7,215 454,085 454,085