Question
The balance sheet of the company ABC as at 1.01.2020: ASSETS EQUITY & LIABILITIES Receivables 3 200 Shareholders' 36 equity 000 Cash and cash 20
The balance sheet of the company ABC as at 1.01.2020: ASSETS EQUITY & LIABILITIES Receivables 3 200 Shareholders' 36 equity 000 Cash and cash 20 Liabilities 3 equivalents 000 100 Deferred cost* 16 800 Accrued cost** 900 Total assets 40 Total equity & 40 000 liabilities 000 * Annual truck insurance purchased in December 2019; coverage starts in January 2020. ** An estimated cost of telecommunication services. In January 2020 the following events occurred (costs by function applied): 1. The company received an invoice for telecommunication services 820. 2. The company bought company Refic. Refic assets: 40 000, liabilities 30 000, paid (in cash) 20 000. 3. On 30.01.2020 the company hired a company to fix production machine. No work has been done yet but the value of contract will be 2 800. 4. On 31.01.2020 the company settled the insurance cost for the month of January. Required: 1. Open the T-accounts based on the Balance Sheet data. 2. Record all transactions in T-accounts and close all accounts. 3. Prepare closing Income Statement for the year ending 31.12.2019
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