Question 1 (60 marks)\ Kenny opened Harborview Pilates Company ('HPC'), a fitness equipment centre, on 1 November 20X2. The company adopts the perpetual inventory system and completed the following transactions during November 20X2, its first month of operation:\ \\\\table[[1 Nov,\\\\table[[Received

$531,500

of cash and

$18,000

of office equipment],[from Kenny, the sole proprietor.]]],[1 Nov,\\\\table[[Purchased

$280,000

of merchandise inventory from],[Professional Supplier Limited. Amount was to be settled],[within 60 days.]]],[1 Nov,Prepaid office rent of

$180,000

in cash for three months.],[12 Nov,\\\\table[[Made a credit sale of

$456,000

. The cost of goods sold was],[

$238,000

. The credit term was

(2)/(15),(n)/(30)

.]]],[13 Nov,Settled the account payable to Professional Supplier Limited.],[15 Nov,Kenny withdrew

$25,000

for personal use.],[25 Nov,\\\\table[[Received

$8,000

of cash from Mountain High Gym for],[future installation service.]]]]\ Additional information:\ a Assume there is no shipping fee for all purchases and sales. Depreciation is recorded only at year end, thus it can be omitted at the month end.\ b The monthly rent of the office is

$60,000

.\ c Since the last day of November is a public holiday, salaries expense of

$154,000

needs to be accrued at the month end.\ d Up to 30 November, HPC has provided installation service worth

$5,000

to Mountain High Gym and earned the revenue.\ Required:\ 1 Prepare journal entries to record the above transactions, including any necessary month-end adjustments for November

20x2

. Explanations are not required.\ (23 marks)\ 2 Prepare HPC's statement of profit or loss for the month ended 30 November

20x2

.\ (6 marks)\ 3 Prepare HPC's statement of financial position as at 30 November

20x2

.\ (13 marks)\ 4 Explain the impacts on the statement of financial position and the statement of profit or loss, if no month-end adjusting entries is made for the following transactions:\ Prepaid rent\ Unearned revenue\ Accrued salaries\ (18 marks)

Question 1 (60 marks) Kenny opened Harborview Pilates Company ('HPC'), a fitness equipment centre, on 1 November 20X2. The company adopts the perpetual inventory system and completed the following transactions during November 20X2, its first month of operation: Additional information: a Assume there is no shipping fee for all purchases and sales. Depreciation is recorded only at year end, thus it can be omitted at the month end. b The monthly rent of the office is $60,000. c Since the last day of November is a public holiday, salaries expense of $154,000 needs to be accrued at the month end. d Up to 30 November, HPC has provided installation service worth $5,000 to Mountain High Gym and earned the revenue. Required: 1 Prepare journal entries to record the above transactions, including any necessary month-end adjustments for November 20X2. Explanations are not required. (23 marks) 2 Prepare HPC's statement of profit or loss for the month ended 30 November 20X2. (6 marks) 3 Prepare HPC's statement of financial position as at 30 November 20X2. (13 marks) 4 Explain the impacts on the statement of financial position and the statement of profit or loss, if no month-end adjusting entries is made for the following transactions: Prepaid rent Unearned revenue Accrued salaries (18 marks)