ICONIC Wine Club Unadjusted Trial Balance For the period ended 31 December 2020 Trial Balance Unit HKS Dr. CE 121,000 146,690 240,000 522,260 14,000 81,000 12,000 1,420,000 180,000 9,000 Cash on hand Bank Beverage Stock (1 Dec 2020) Accounts Receivable Utilities Deposit Paid Office Supplies Prepaid Club License Fixed Assets Accumulated Depreciation Allowance for Doubtful Accounts Accounts Payable Salaries & Wages Payable Unearned Revenue Bank Loan Common Stock Retained earnings Revenue Dividends Salaries & Wages Expenses Rental Fee Bad Debt Expense Promotion Expenses 305,400 3,000 452,800 20,000 130,000 877,770 1,940,800 10,000 641,300 583,920 9,000 117,600 3,918,770 3,918,770 ICONIC Wine Club has the above unadjusted trial balance for the period ended 31 December 2020. Beverage stock on hand after stock take by the end of the month was valued at $50,000. Additional information is as follows: a) The fixed asset is depreciated at 10% using reducing balance method, with no residual value. b) Prepaid club license fee for 12 months from 1 December 2020 to 30 November 2021. c) Purchased $60,000 beverage which were in transit (FOB destination) that were not included in the stock take, carriage inwards on this purchase at $3,000, ICONIC Wine Club will settle the payment upon receipt of invoice d) Returned $2,000 beverage to supplier at the end of the month due to spoilage e) Beverage at $3,000 sold on account in December was returned by member at the end of the month due to damaged packing f) $800 loan interest for the month of Dec is due but unpaid g) A wedding couple that paid $15.000 deposit to the club previously called in December and requested to cancel its wedding ceremony planned late December due to social distancing measures. The wedding couple agreed to forfeit 80% of the paid deposit and requested to hold the rest as credit at ICONIC Wine Club for wine purchase in future, ICONIC Wine Club accepted. h) Upon further review, it was noticed that among the $81,000 office suppliers on hand, 5,000 of the office suppliers were damaged and could not be used, the management decided to dispose the damaged office supplies. 1) The financial controller determined that a bad debt provision of S12,000 should be provided; the current Allowance for Doubtful Accounts has a $9,000 credit balance. The club is using % of Receivable Method. j) Upon further review by the Financial Controller, among the Salary & Wages Expense recorded in December, casual labor wages totaling $3,000 was in fact for 1 January and should not be recorded in December. The $3,000 casual labor wage was not paid by the end of December. Required: (iii) Prepare a Retained Earnings Statement and Balance Sheet for the year ended 31 December 2020. (9 points)
