Question 1B

Prepare adjusting journal entries in the general journal provided below for the following assuming annual Balance Day is upon the firm:

• The business owns a vehicle which is to be depreciated on the basis of kilometres travelled. The depreciation rate per kilometre is 20c. The vehicle has travelled 55 000 kilometres in the current period. Complete the required entry.

• Furniture and fitiings is held in the books at cost of $12,000. The expected residual value is $2,000. The expected economic benefits are expected to be received for 10 years. Complete the required entry.

• An item of manufacturing machinery The Cutter cost the business $300,000 4 years ago. The accumulated depreciation account has a balance of $100,000 as at last balance day. This equipment has an anticipated residual of $20,000 and is to be depreciated at 10% per annum. Complete the required entry for Year 5.

• Accounts receivable are subject to an allowance of 5% for suspected non-collectibles. The balance in the Accounts Receivable Account is $220,000. Create the required provision.

• The business adopts a perpetual inventory system and applies the FIFO

inventory flow assumption. Opening inventory at 1 June comprised 500 statues valued at $100 each. Purchases of inventory during the period were 400 purchase cost was $110 each. During the period 550 statues were sold on credit all sales were at $250 each statue. A stock take at 30 June show 320 statues were left on the floor. Complete the required entry to adjust the inventory position at Balance Day.