Your supervisor has requested your assistance with the preparation & drafting of the Financial Reports of Suntory Ltd for the period ending 30 June, 2020. The company uses periodic inventory system....

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Your supervisor has requested your assistance with the preparation & drafting of the Financial Reports of Suntory Ltd for the period ending 30 June, 2020. The company uses periodic inventory system. All sales of goods of Suntory Ltd. are on a credit basis. The Unadjusted Trial Balance of Suntory Ltd., as at 30 June 2020 shows the following ledger account balances: SUNTORY LTD Unadjusted Trial Balance as at 30 June 2020 _________________________________________________________________ AccountDebitCredit _________________________________________________________________ Share capital$1 340 000 First Call10 000 Retained earnings92 000 Accounts payable40 000 Bank overdraft (current)220 000 Mortgage payable400 000 Land$204 000 Buildings 800 000 Accumulated depreciation – buildings140 000 Motor Vehicles 100 000 Accounts receivable109 900 Provision for doubtful debts2 000 Inventory (1 July 2019)300 000 Investments800 000 Sales504 000 Interest revenue35 000 Sales returns & allowances5 000 Purchases261 000 Freight inwards3 000 Salaries 93 800 Directors Fees6 000 Commission expense2 000 Interest expense20 000 Delivery expense4 000 General expenses 54 300 . $2 773 000$2 773 000 PART A Your first task is to prepare General Journal entries using the template provided to record the following required adjustments at 30 June, 2020; Suntory Ltd transactions during 2019/2020: · Write off bad debts for the period ending 30 June, 2020 $1 925 · Record income tax expense and current tax liability of $18 000. · Declare a final dividend, $30 000. No ratification of this dividend is needed. · An amount of $20 000 is to be transferred to a general reserve from retained earnings. Suntory Ltd’s end of financial year adjustments: · Provide for annual depreciation charges at 5% p.a. on cost of buildings for the whole year. · Motor vehicles were purchased on March 1, 2020. Provide for the partial year depreciation charge using the following information; 1. Cost $100 000 2. Residual value $10 000 3. Useful life 5 years 4. Sum of the years digits depreciation method is to be used. · Record the estimated Bad debts expense of 0.5% for the year ending 30 June, 2020 based on the percentage of net credit sales method. (NB; All Suntory Ltd. sales are on a credit basis) PART A - Adjusting entries Note: No adjusting entry is made for beginning and ending inventory. Under the periodic inventory system, these items would be amended as part of closing entries. 2020 GENERAL JOURNAL SUNTORY LTD DR CR June 30 PART B Your next task is to prepare a detailed Classified Income Statement for the period ending 30 June, 2020 with reference to the General Journal adjustments in Part A. SUNTORY LTD Income Statement for the year ended 30 June 2020 PART C Your final task is to prepare closing balances for equity accounts and a Balance Sheet, including a detailed equity section as at 30 June, 2020 using the following information & with reference to the General Journal adjustments in Part A; The Share Capital account of Suntory Ltd. represents: January 2019 - 600 000 $1 shares issued and fully paid on application. September, 2019 - 1 000 000 $1 shares were issued on subscription with applications payable as follows; 25c per share payable on Application 25c per share payable on Allotment The remaining amount payable under Two Calls of .25c each Nov. 2019 The share issue is fully subscribed & directors proceed with allotments. Share issue costs of $10 000 were paid on November 15. Dec. 2019 All Application & Allotment money owing was fully paid Feb. 2020 Call #1 of 25c per share was made in February on these 1 000 000 shares, but 40 000 shareholders had failed to pay the call by 30 June 2020. An interim dividend of $30 000 has been paid during the year out of retained earnings. Required; Using the templates provided complete the balances to be carried down in the following Equity accounts; i. Share Capital ii. Call #1 iii. Retained Earnings iv. General Reserve Share Capital Balance b/d $600 000* Call #1 Retained Earnings General Reserve Prepare a Classified Balance Sheet for Suntory Ltd as at 30 June, 2020 also with reference to the General Journal adjustments in Part A. SUNTORY LTD Balance Sheet as at 30 June 2020 UOWCA-WUCB104-EXSFPage 1 of 6