Question 2 Eastern Trading Co Ltd - Trial Balance as at 31 December 20X1 Dr ($) Cr ($) 109,050 16,650 936 4,000 29,970 33,707 7,640 1,875 6,250 12,500 50,000 69,000 Ordinary share capital Asset revaluation reserve (see note below) Accumulated losses General reserve Cash at bank Cost of goods sold Inventories (31 December 20X1) Accounts receivable Furniture Motor Vehicles (used for sales deliveries) Land (see note below) Buildings Allowance for impairment (receivables) Accumulated depreciation - furniture Accumulated depreciation - motor vehicles Provision for taxation Accounts payable 10% Bonds payable Stationery & office supplies Advertising Office salaries Directors' fees Repairs to motor vehicles Electricity Property tax Sales salaries Discount on accounts receivable Bad debts Loss on disposal of motor vehicle 90 1,820 5,900 80 2,892 7,000 1,268 1,750 9,480 4,260 825 1,186 920 8,900 320 80 199 350 214 98,420 Discount received on accounts payable Sales Sales returns Commission revenue Interim dividends (paid) 320 60 4,440 | 229,526 229,526 Note: Land was revalued from $33,350 to $50,000 during the year, the gain on revaluation of $16,650 was credited to Asset Revaluation Reserve account. Additional adjustments for consideration (1) Included in the ending inventories was some damaged stock (costing $1,500). The company decided now to write them off (2) Allowance for impairment (receivables) to be adjusted to $100 (3) Interest on bonds (6 months) owing; accrued sales salaries $190. (4) Advertising expense included an amount paid in advance $250. (5) Audit fees owing $520. (6) Transfer to general reserve $1,000. (7) Depreciation on furniture -10% on cost, buildings -10% on cost and motor vehicles - 20% on cost. (8) Provision for taxation for current year is $4,300. 19) There was an overprovision of income tax last year. (10) Directors proposed a final dividend of $3.922 in February 20X2. Required: Prepare the necessary year-end adjusting entries. a) b) Prepare a classified Statement of Comprehensive Income for the financial year ended 31 December 20X1. Prepare a Statement of Changes in Equity for the financial year ended 31 December 20X1. d) Prepare a statement of Financial Position as at 31 December 20X1. Question 2(a) Date Particulars Debit ($) Credit ($) 31/12/X1 (Inventory write-off) (Provide for impairment) (Accrual of debenture interest, sales salaries) (Prepaid advertising) (Accrual of audit fees) (Transfer to general reserve) (Provide for depreciation of furniture) Date Particulars Debit ($) Credit (S) (Provide for depreciation of buildings) (Provide for depreciation of motor vehicles) (Provision for corporate tax) (Overprovision in taxation adjusted) (Proposed final dividends)
