Lee Ltd began its operation on 1 July 2019. Below is the unadjusted trial balance of Lee Ltd as at 30 June 2020. Lee Ltd Unadjusted Trial Balance as at 30 June 2020 Debit Account Name Credit $ $ Cash at Bank Accounts Receivable Inventory Supplies (asset) Prepaid Insurance Equipment (cost) Vehicles (cost) Cost of Sales Sales Returns and Allowances Salaries Expenses (sales staff) Utilities Expense Insurance Expense Accounts Payable Bank Loan (10% interest p. a.) Share Capital Sales 328,960 26,500 352,000 12,500 10,200 120,000 80,000 849,000 12,500 126,200 15,000 2,040 102,500 142,000 440,000 1,250,400 $1,934,900 $1,934.900 i . Journalise the adjusting entries on 30 June 2020, in the General Journal. (Note: closing entries are NOT required). ii. Complete the Worksheet for the year ended 30 June 2020. iii. Prepare a classified Statement of Profit or Loss and Comprehensive Income for Lee Ltd for the year ended 30 June 2020, as per Figure 4.6 of your text. Your answer should clearly identify Net Sales, Gross Profit, and Net Profit (Loss) Before Tax. iv. Prepare a classified Statement of Financial Position for Lee Ltd as at 30 June 2020. Additional data as at 30 June 2020: (a) Supplies on hand on 30 June are $500. Adjustments to the supplies have not been made since its operation. 10 2002/110.109 Distance/Internal Assignment 2 Booklet Manawatu/Auckland/Distance (b) The annual insurance was purchased on 1 April 2020. Adjustments to Prepaid Insurance have been made until and including 31 May 2020. (c) Sales staff salaries of $12,000 are owed as at 30 June 2020. (d) No depreciation has been charged since the following assets were bought. Equipment: Equipment was bought on 1 July 2019. The equipment is expected to have a useful life of five years with an estimated residual value of $10,000 . Vehicles: All vehicles were bought on 1 January 2020 with no residual value. The straight-line method at a rate of 5% per annum is used for all the vehicles. (e) (f) June's utility bill of $1,000 was received from Contact Energy and is payable on 10th July 2020. The bill has not yet been recorded in the accounts. Use the Accounts Payable to record the bill. The bank loan was taken out on 1 April 2020. The principal of the loan is to be paid at the end of the loan terms of 5 years. The interest for the second quarter of 2020 (April - June) is payable on the first day of the next quarter at a rate of 10% p.a. The interest is calculated on a quarterly basis but not compounded. The firm reports Supplies, Insurance, Utilities and Depreciation Expenses under the General Expenses on the Statement of Profit or Loss. Interest Expenses is listed separately under Financial Expenses. All profits will be retained at the end of the year. (g) (h)
