Please provide detailed explanations and calculations, ledger accounts and journal entries for all of the

adjustments made in the assignment.

Good luck!

PURITEE, a limited liability company, has an accounting year end of $31$ December. The accountant is

preparing the financial statements as at $31$ December $2023$ and requires your assistance. The following

trial balance has been extracted from the general ledger:

Dr Cr

$$000$ $$000$

Cash $16,400$

Bank balance $1,400$

Trade payables $5,000$

Trade receivables $6,400$

Allowance for receivables at $1$ January $2023200$

$10\%$ Loan, repayable in $20286,000$

Buildings at cost $14,800$

Buildings accumulated depreciation, $1$ January $20231,200$

Plant at cost $4,400$

Plant accumulated depreciation, $1$ January $20232,200$

Revenue $46,000$

Purchases $22,800$

Administrative expenses $6,500$

Equity shares, $$18,300$

Share premium account $1,600$

Retained earnings at $1$ January $20232,600$

Inventory at $1$ January $20233,200$

$$

$74,50074,500$

$$

The following additional information is also available:

$$ Plant is depreciated at $20\%$ per annum using the reducing balance method and buildings are

depreciated at $5\%$ per annum on their original cost. Depreciation is treated as a cost of sales.

$$ On $31$ December Buildings were revalued to $18$ mln USD. No journal entry was provided to account

for this transaction.

$$ Salary expenses for December $2023$ were not yet accounted for. Gross salary is estimated at

$300,000$$$.$ Out of $100$ employees, $30$ employees have $1$ child each and education expenses for all

children during academic year of $9$ months $($from September till May$)$ in the amount of $30,000$$$.$ Salary

payable is treated within Trade payable account. $30\%$ of Salary expense are included in Administrative

expenses, $70\%$ are included in Cost of Sales.

$$ The allowance for receivables is to be increased to $5\%$ of trade receivables. The allowance for

receivables is treated as an administrative expense.

$$ An invoice of $$50,000$ for energy costs relating to the quarter ended $31$ December $2023$ was received

on $2$ January $2024.$ Energy costs are included in administrative expenses.

$$ Closing inventory has been counted and is valued at $$1,500,000$

$$ No finance cost was accounted for during the year. The finance cost is payable on an annual basis at

the year end.

$$ Income tax expense was estimated at $$10,000$ and is payable within $3$ months period of the next

accounting period. No accounting entries were made for income tax expense.

$$ USD$/$KGS foreign exchange rate is $85$ KGS$/$USD for the purposes of payroll cost estimation.

Required: Prepare the statement of profit or loss and the statement of financial position of

PURITEE Co as at $31$ December $2023$ based on the updated trial balance. Provide all relevant

journal entries and ledger accounts to complete the tasks.