Question 4 (24 marks)

The following is the trial balance for Supreme Limited as at 31 December 2019.

Supreme Limited

Trial Balance as at 31 December 2019

Accounts receivable

Cash

Equipment

Accumulated depreciation equipment 6% note payable

Ordinary shares, 500,000 shares authorized, 100,000 shares issued Retained earnings

Cash dividends

Service revenue

Salary expense

Rent expense

Depreciation expense equipment

Additional information:

Dr Cr $$

130,000 142,000 480,000

40,000

323,000

112,000 160,000 10,000 1,074,000

1,074,000

90,000 120,000 310,000 231,000

(i) On 28 December 2019, the company declared final cash dividends of $60,000. The final cash dividends would be paid on 28 January 2020. No entry had been made for this transaction when preparing the above trial balance.

(ii) The 6% note payable shown in the trail balance was a one-year note signed on 1 April 2019. The note requires payment of principal and interest at maturity. No entry had been made for the accrual of interest at the year end.

(iii) The ordinary shares issued by Supreme Limited have no par value.

Required:

For Supreme Limited,

(a) prepare the income statement for the year ended 31 December 2019. (5 marks)

(b) prepare the statement of changes in equity for the year ended 31 December 2019. (4 marks)

(c) prepare the classified statement of financial position as at 31 December 2019. (15 marks)

[Total marks for Question 4: 24 marks]

Cr Question 4 (24 marks) The following is the trial balance for Supreme Limited as at 31 December 2019. Supreme Limited Trial Balance as at 31 December 2019 Dr $ Accounts receivable 130,000 Cash 142.000 Equipment 480,000 Accumulated depreciation - equipment 6% note payable Ordinary shares, 500,000 shares authorized, 100,000 shares issued Retained earnings Cash dividends 40,000 Service revenue Salary expense 112,000 Rent expense 160,000 Depreciation expense - equipment 10,000 1,074,000 90,000 120,000 310,000 231,000 323,000 1,074,000 Additional information: ) On 28 December 2019, the company declared final cash dividends of $60,000. The final cash dividends would be paid on 28 January 2020. No entry had been made for this transaction when preparing the above trial balance. (1) The 6% note payable shown in the trail balance was a one-year note signed on 1 April 2019. The note requires payment of principal and interest at maturity. No entry had been made for the accrual of interest at the year end. (iii) The ordinary shares issued by Supreme Limited have no par value. Required: For Supreme Limited, (a) prepare the income statement for the year ended 31 December 2019. (5 marks) (b) prepare the statement of changes in equity for the year ended 31 December 2019. (4 marks) (c) prepare the classified statement of financial position as at 31 December 2019. (15 marks) Total marks for Question 4: 24 marks]