AC5803 Assignment 1
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Part
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a
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b
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c
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d
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e
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Total
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Marks
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(a). Type your answer to part (a) here
(b). Type your answer to part (b) here
…
(5). Type journal entries as follows:
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Part a.
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Date
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Account Name
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Amount
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Jan. 1
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Dr. Cash
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10,000
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Cr. Sales Revenue
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10,000
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Assignment 1: [Total = 50 marks]
Due: Beginning of week 5 class. Late submission will not be accepted.
The Brady Company has the following balance sheet at Dec. 31, 2022.
The Brady Company
Balance Sheet as of Dec. 31, 2022
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Assets
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Liabilities
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Cash
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160,000
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Bank Loan
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50,000
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Inventory
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40,000
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Equity
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Shareholder Capital
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150,000
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Total
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200,000
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Total
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200,000
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The company has the following transactions in 2023:
(1). Jan. 1, signed a three-year service contract with Manning Company, and received full payment of $30,000.
(2). Feb. 28, paid two years’ office rental starting from Mar. 1. The total payment is $48,000.
(3). April 1, purchased a machine for $100,000. The machine has an expected useful life of 20 years, and residual value of $10,000.
(4). July 26, sell inventory to Rogers Company on credit for 20,000, inventory worth 15,000 delivered.
(5). Dec. 1, announced dividends $10,000 to shareholders, to be paid on Mar. 31, 2024.
(6). Dec. 15, received $5,000 payment from Rogers Company.
(7). Dec. 31, recorded total wages $40,000 to all employees, to be paid on Jan. 1, 2024.
Additional
(i). The bank loan is borrowed on Dec. 31, 20202022. It is for 5 years with annual interest rate 4%. Interest payment is to be made on January 1 and July 1 of each year. (No interest payment on Jan. 1 2023.)
(ii). Depreciation for PPE (such as machine) starts in the month of acquisition, using the straight-line method.
(iii). Dec. 31, it is estimated that 40% of the amount due from Rogers Company may not be paid.
(iv). For expenses, clearly specify the type of expenses such as COGS, etc in your journal entries. Do not simply use expense.
Required
a. Prepare journal entry for the above transactions. [25 marks]
b. Prepare adjusting entries at Dec. 31, 2023. [25 marks]