Introductory Financial Accounting - Accounting & Finance Assignment Help

Assignment Task

Question 1: Accounting Cycle
Below is the unadjusted trial balance of Matila Ltd as at 31 July 2021. The company’s financial year ends on 31 July.
Matila Ltd
Unadjusted Trial Balance as at 31 July 2021
Account Name
Debit
$
Credit
$
Cash at Bank
47,600
Accounts Receivable
45,500
Inventory
16,000
Office Supplies (asset)
500
Prepaid Insurance
1,000
Equipment (cost)
30,000
Vehicle (cost)
86,000
Dividends Paid
5,000
Sales Returns and Allowances
5,500
Cost of Sales
22,625
Discount Allowed
3,200
Electricity Expense
4,300
Insurance Expense
1,375
Interest Expense
4,400
Salaries Expense
20,500
Allowance for Doubtful Debts
1,980
Accumulated Depreciation - Equipment
4,500
Accounts Payable
45,000
PAYE Payable
2,000
Bank Loan (6% interest p.a.)
80,000
Share Capital
26,000
Retained Earnings
57,000
Sales
65,000
Discount Received
3,920
Other Income
8,100
293,500
293,500

Additional data as at 31 July 2021:
(a) Office supplies on hand at 31 July 2021 are $200.
(b) Matila Ltd uses the allowance method for bad debts. Bad debts to be written off are $500.
(c) After bad debts are written off, the company decides to readjust Allowance for Doubtful Debts to 5% of Accounts Receivable.
(d) The insurance is paid annually in advance on 1 March of every year. Adjustments to Prepaid Insurance have been made until and including 30 June 2021.
(e) Salaries accrued but not paid at 31 July 2021 are $1,000 (Gross). PAYE (10% of Gross) is payable on the 10th of each month.
(f) No depreciation has been charged since the end of the last financial year. Depreciation is to be charged at the following rates:
• Equipment: Straight-line method at 3% of the cost is used for the equipment. The equipment was purchased on 1 April 2020.
• Vehicle: The company bought a vehicle on 1 February 2021 with a useful life of 5 years. The estimated residual value is $6,000. The straight-line depreciation method is used for the vehicle.
(g) The bank loan was taken out on 1 April 2020 for five years. The principal of the loan will be paid at the end of the loan term. The interest on the loan is due monthly at the end of each month at a rate of 6% p.a., but paid on the first day of the following month. Interest is calculated on a monthly basis but not compounded.
(h) All profits will be retained at the end of the year due to the economic downturn.

Required:
For the purpose of this question, please ignore GST and Income Tax. Show ALL your workings. Narrations for journals are NOT required.
i. Journalise the adjusting entries on 31 July 2021, in the General Journal. (Note: closing entries are NOT required).
ii. Complete the Worksheet for the year ended 31 July 2021.
iii. Prepare an Unclassified Statement of Profit or Loss and Comprehensive Income for Matila Ltd for the year ended 31 July 2021. Your answer should clearly identify Net Sales, Gross Profit, and Net Profit (Loss) Before Tax.
iv. Prepare a Statement of Changes in Equity for Matila Ltd for the year ended 31 July 2021.
v. Prepare a Classified Statement of Financial Position for Matila Ltd as at 31 July 2021.

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