Question

You have been provided with the Unadjusted Trial Balance for Whiteley Ltd. as at June 30, 2019. The company uses the periodic system for inventory management. All sales revenue is recorded on credit, no cash sales are made by the company. There are four (4) parts to this question including PART A: General Journal entries, PART B: Classified Income Statement, PART C: Equity ledger account closing balance calculation and PART D: Classified Balance sheet. e WHITELEY LTD Unadjusted Trial Balance as at 30 June 2019 Account Debit Credit $960 000 260 000 72 000- 30 000 24 800+ 60 300- 450 000 36 000- 38 800 157 2002 115 400 Share capital (960 000 shares fully paid) General reserve Retained earnings Revaluation surplus Current tax liability Accounts payable Debentures Bank overdraft (current) Other liabilities (current) Land $480 000 Buildings 828 000 Accumulated depreciation - buildings Office equipment 192 000- Accumulated depreciation - office equip. Delivery vehicles 84 000 Accounts receivable 87 200 Allowance for Doubtful debts Inventory (1 July 2018) 288 000 Investments 190 000 Prepaid insurance 10 000 Sales Interest revenue Purchases 298 000 Sales returns and allowances 2 600 Purchases returns and allowances Freight inwards 12 900 Freight outwards 10 800- Wages expense 128 2002 Interest expense 12 250- Advertising expense 37 000 Income tax expense 24 800 Administrative expenses 120.750 $2 806 500 2 500 589 900 7 200 2 400- $2806 500 Required: Prepare General Journal entries, including narrations, to record the following transactions in the template provided. Whiteley Ltd transactions during 2019/2020:

Answer 1

Retained Earnings

Particulars	Dr Amount	Particulars	Cr Amount
		By Balance b/d	$       72,000
To General Reserve	$ 119,000
To Profit and Loss (Loss for the year)	$       23,223
		By Balance c/d	$ 70,223
	$       142,223		$       142,223

Workings:

Profit and loss statement

Particulars	Amount	Amount
Income:
Sales	$         5,89,900
Less: Sales Return	$ 2,600	$         5,87,300
Net Sales
Cost of Sales:
Beginning Inventoy	$         2,88,000
Purchases (Less: Purchase Returns)	$         2,95,600
Freight Inwards	$             12,900
Less: Ending Inventory	$ 3,98,000	$         1,98,500
Gross Profit		$         3,88,800
Other Income:
Interest on Investments		$             19,200
Expenses:
Selling and Distribution Expenses:
Freight Outwards	$             10,800
Depreciation Expense - Delivery Vehicles	$             15,200
Adv Expense	$             37,000
Wages Expense	$         1,28,200	$         1,91,200
Administrative Expenses:
Administrative Expenses	$         1,20,750
Depreciation Expense - Office Equipment	$             19,200
Depreciation Expense - Buildings	$             41,400
Insurance Expense	$               7,000	$         1,88,350
Finance Expenses:
Interest on Debentures	$             24,400
Bad debts	$               2,473	$             26,873
Profit before tax		$               1,577
Income Tax		$             24,800
Loss for the year		$ 23,223

Balance sheet

Particulars	Amount	Amount
Current Assets:
Accounts Receivable (87200-2036)	$             85,164
Less: Allowance for Doubtful Debts	$               2,937	$             82,227
Inventory		$         3,98,000
Interest Receivable		$             12,000
Prepaid Insurance		$               3,000
Total current assets		$         4,95,227
Non-Current Assets:
Investments		$         1,90,000
Land		$         4,80,000
Buildings	$         8,28,000
Less: Accumulated Depreciation	$         1,98,600	$         6,29,400
Delivery Vehicles	$             84,000
Less: Accumulated Depreciation	$             15,200	$             68,800
Furniture and Equipment	$         1,92,000
Less: Accumulated Depreciation	$         1,34,600	$             57,400
Total non current assets		$       14,25,600
Total assets (a)		$       19,20,827
Current Liabilities:
Accounts Payable		$             60,300
Bank Overdraft		$             36,000
Current Tax Liability		$             24,800
Interest Payable		$             12,150
Other		$         1,57,800
Total current liabilities		$         2,91,050
Non-Current Liabilites:
Debentures		$         4,50,000
Total non current liabilities		$         4,50,000
Total current liabilities (b)		$ 741,050
Net Assets (a) - (b)		$       11,79,777
Equity:
Share Capital (960000+20000)		$         9,80,000
General Reserve		$         260,000
Revaluation Surplus (30000-20000)		$ 10,000
Retained earnings		$ (70,223)
		$       11,79,777