Question 3

After graduating from a business school, both Peter and John decided to embark on their own business instead of looking for a job. The company PJ Pte Ltd, was set up on 1 June 20X1 to provide software services. Peter contributed office equipment (computer system, printer, etc.) worth $15,000 (fairly valued) and cash $35,000 to the business venture. John also contributed cash to the same equity amount of Peter. Both managed to persuade their parents to give them an interest-free loan of $100,000 to the company.

The company applied for assistance from the government and was given a premise to operate the business at no cost for the first six months.

The followings were the transaction for the month of June 20X1.

(1)On 2 June, a customer paid $2,500 to develop an App for its marketing campaign.

(2)On 3 June, the company purchased office supplies amounting to $800 on credit.

(3)On 7 June, KK Pte Ltd. commissioned the company to customise their office software at a package price of $3,000. KK Pte Ltd. placed a deposit of $500 for the job.

(4)The company delivered the marketing campaign App to the customer on 15 June. The customer accepted and was happy with the App. The customer paid another $2,000 to make some modifications by including additional features into the App.

(5)On 16 June, the company paid $600 for the purchase made on 3 June.

(6)On 22 June the company completed the job commissioned on 7 June and billed the customer.

(7)On 25 the company received a utility bill of $350.

(8)On 26 June, the company paid salaries of $4,000 for the month of June. This was 80% of the total salaries. The remaining will be paid in the first week of the next month.

(9)Office supplies on hand at the end of the month was $760.

Required:

(a)Analyse the transactions and present the journal entries/adjusting journal entries for PJ Pte Ltd for the month of June 20X1.

(17 marks)

(b)Show the T-account for cash.

(9 marks)

(c)Prepare the trial balance of PJ Pte Ltd as at June 30, 20X1.

(9 marks)

(d)From the trial balance, prepare:

(i)The Income Statement for the month ending 30 June, 20X1.

(7 marks)

(ii)The Statement of Financial Position as at 30 June, 20X1.

(16 marks)