On 31 Dec 2017, the accounting records of Holland V Ltd showed the following accounts and their balances: Debit $ Credit $ Share capital ? Retained earnings, 31 Dec 2016 ? Machinery at cost 637,500 Motor vehicles at cost 250,000 Accumulated depreciation ? machinery 125,000 ? motor vehicles 62,500 Purchase 1,409,250 Sales 2,313,250 General expenses 52,000 Wages and salaries 448,500 Rental expense 15,250 Allowance for doubtful debts 3,000 Accounts receivable 185,500 Accounts payable 170,750 Bank 40,500 Inventory, 31 Dec 2016 204,750 You are given the following additional information: (i) The authorized and issued share capital compromise 500,000 shares at $1.00 each. (ii) Inventory at 31 Dec 2017 is $194,750. (iii) Wages and salaries due at 31 Dec 2017 is $18,688. (iv) Rental paid in advance at 31 Dec 2017 is $3,810. This amount has been included in the rental expense of $15,250. (v) The company estimated that 2% of accounts receivable will be uncollectible. ACC202 Copyright © 2018 Singapore University of Social Sciences (SUSS) Page 6 of 10 Examination – July Semester 2018 (vi) No depreciation has been charged for the year ended 31 Dec 2017.

 The company depreciates non-current assets as follows: ? Machinery: straight line over 5 years. ? Motor vehicles: 25% per annum using the double declining balance method. Required: (a) Analyse the information above and prepare the necessary 31 Dec 2017 adjusting journal entries. No narrations required. (11 marks) (b) Identify the relevant accounts and compute the following after incorporating the adjustments to the trial balance: (i) Total Non-current assets. (ii) Total Current assets. (iii) Total Liabilities. (iv) Total Equity. (16 marks)