A business dealing in computer accessories two years ago, Singapore

INDIVIDUAL ASSESSMENT 1 (100 marks)

Question (100 marks)

Gregory See started Agape Trading, a business dealing in computer accessories two years ago. The following trial balance has been extracted from his business records as at 31 May 2019:

The following additional information was made available before the year-end closing.
1. A physical count on 31 May 2019 revealed stocks on hand to be $128,000.
2. Commission income of $12,000 monthly has not been received nor recorded for February to May 2019.
3. Rent expense of $48,000 relates to payments made for period 1 March 2019 to 30 June 2019.
4. Salaries for the accounting year was paid up to 31 January 2019 only. Monthly salaries remained constant during the accounting year.
5. May 2019 sales included $24,300 paid by a customer for goods to be delivered in June 2019.
6. Cash discounts of $5,400 granted to credit customers have not been recorded in the accounts.
7. One of the credit customers who owed $5,900 settled the amount by cheque. This transaction was recorded as $9,500 on both the accounts.
8. Included in the utilities expense is a payment for Gregory’s home utilities of $3,900.
9. Payment of $7,500 for transport costs to deliver goods to a customer was recorded on the opposite sides of the accounts.
10. Gregory paid trade payables $14,250 with his personal cheque with a discount given to him at 5%. This transaction has not been recorded.
11. The amount of annual depreciation on fixed assets were as follows:
Office Equipment – $19,280
Delivery Vehicle – $31,770

Required:
(a) Prepare the necessary general journal entries to record transactions (2) to (11).
Narrations are not required.
(Hint: For some transactions, you will need to create new accounts which are not shown on the trial balance.) (40 marks)
(b) Prepare the following financial statements for Agape Trading:
(i) Statement of Comprehensive Income for the year ended 31 May 2019
(ii) Statement of Financial Position as at 31 May 2019 (60 marks)