Tracy, the sole proprietor of Urban Co., deals in office supplies. Its unadjusted trial balance as at 30 September 2024 is given as follows:
Unadjusted Trial Balance as at 30 September 2024
| Account Titles | Dr (Amount) | Cr (Amount) |
|---|---|---|
| Sales | 1,420,000 | |
| Returns | 32,500 | 27,000 |
| Commission received | 83,000 | |
| Utilities expense | 75,000 | |
| Advertising expense | 82,000 | |
| Freight inwards | 11,700 | |
| Freight outwards | 43,000 | |
| Purchases | 922,500 | |
| Insurance expense | 23,000 | |
| Salaries and wages expense | 151,300 | |
| Rent revenue | 18,000 | |
| Motor vehicle | 768,864 | |
| Office equipment | 192,000 | |
| Accumulated depreciation as at 1 Oct 2023 | ||
| – Motor vehicle | 270,600 | |
| – Office equipment | 81,000 | |
| 8% Bank Loan, due in 2035 | 250,000 | |
| Trade payables | 183,000 | |
| Trade receivables | 298,000 | |
| Capital-Tracy | 370,000 | |
| Drawings-Tracy | 36,610 | |
| Inventory as of 1 Oct 2023 | 109,000 | |
| Cash at Bank | 32,000 | |
| Discounts | 12,882 | 23,756 |
| Total | 2,758,356 | 2,758,356 |
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The following additional information was extracted from the records towards the end of the financial period.
1. Rent income of $4,900 for September 2024 was yet to be received from the tenant.
2. Utilities for the financial year was paid up to 31 July 2024. Monthly utilities remained constant during the financial year.
3. The 8% bank loan was taken on 1 July 2024. The interest expense has yet to be accounted for.
4. Advertising of $25,000 included in the trial balance was paid on 1 September 2024 for 5 months.
5. Tan Trading owed Urban Co. $20,000 and settled the amount early by cheque and was given a 5% cash discount. The discount has not been recorded.
6. A credit sale of $8,000 has been recorded as $800 by mistake.
7. Tracy took $1,800 of inventory for personal use.
8. Annual depreciation on fixed assets were as follows: Motor vehicle $20,970 Office equipment $18,100
9. A physical count on 30 September 2024 revealed stocks on hand to be $158,000.
Required:
(a) Prepare the necessary general journal entries to record transactions (1) to (8).
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 Urban Co.:
(i) Statement of Comprehensive Income for the year ended 30 September 2024
(ii) Statement of Financial Position as at 30 September 2024
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