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For each of the following questions: Prepare the necessary journal entries for year-ended 31 December 2018. Prepare the Income Statement ( Statement of Profit or

For each of the following questions:

  1. Prepare the necessary journal entries for year-ended 31 December 2018.
  2. Prepare the Income Statement (Statement of Profit or Loss and Other Comprehensive Income), classifying expenses by function, for the year ended 31 December 2018.
  3. Prepare the Statement of Changes in Equity for the year ended 31 December 2018.
  4. Prepare the Balance Sheet (Statement of Financial Position) as at 31 December 2018.

Question 3

The following account balances are taken from the General Ledger of P&G Co. on 31 December 2018, the end of its fiscal year.

$

Accounts Payable

47,300

Accounts Receivable

91,000

Accumulated depreciation furniture and fittings

21,300

Accumulated depreciations plant and equipment

46,780

Allowance for Bad Debts (credit balance)

1,800

Cash

34,400

Furniture and fixtures

65,500

Inventories

84,000

Loans Payable

120,000

Plant and equipment

227,500

Share Capital, no par

100,000

Retained earnings, 31 December 2017

108,020

Dividends interim

9,000

Sales

409,000

Sales Returns & Discounts

20,430

Purchases

184,000

Purchases Discounts

6,780

Selling Expenses

48,650

Administrative Expenses

39,900

Other operating Expenses

17,000

Office Rent Expenses

36,000

Interest Expense

3,600

Additional information:

  1. The Administrative expenses incorrectly include $12,000 for office furniture purchases. The purchases were made on 1 May 2018.
  2. Depreciation of 10% (to the nearest month for additions during the year).
  3. Inventories based on a physical count at 31 December 2018 were determined to be $60,000.
  4. Tax payable estimated as $4,000.
  5. The loans were obtained on 1 May 2018 and are repayable in four equal annual installments with the first payment due on 1 May 2019. The interest charged is 6% per annum payable on a semi-annual basis.
  6. The board of directors proposed final dividends of $9,000 for the year-ended 31 December 2018.

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