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ACC201: Financial Accounting

EE Ltd is a company incorporated in Singapore and uses the Singapore Financial Reporting Standards (FRSs). Its financial year end is 31 December. EE Ltds unadjusted trial balance includes the following account balances as at 31 December 20X7:

Trial Balance as at 31 December 20X7
	Debits	Credits
	$	$
Cash	142,350
Accounts Receivable	232,600
Allowance for Impairment Losses		4,000
Interest Receivable	2,600
Supplies	277,200
Prepaid Insurance	13,050
Notes Receivable (short-term)	100,000
Equipment	555,600
Accumulated Depreciation Equipment		129,000
Accounts Payable		251,400
Unearned Revenue		18,400
Share Capital		432,200
Retained Earnings		578,000
Service Revenue		81,000
Interest Revenue		43,800
Repair and Maintenance Expense	52,800
Rent Expense	35,600
Salaries and Wages Expense	126,000
Totals	$1,537,800	$1,537,800

The following information pertaining to the financial year ending 31 December 20X7 are available to determine additional journal entries:

1. 1. The prepaid insurance was purchased at the beginning of July to provide coverage for nine months from July 20X7 through March 20X8.
2. 2. The company estimates $16,300 in depreciation each year.
3. 3. A count showed $172,000 of supplies on hand at the end of the year.
4. 4. The notes receivable was accepted on 1 October 20X7 and will be due in six months time, together with the interest, and the interest rate is 8% per annum.
5. 5. Services in the amount of $11,200 were performed for customers who had previously paid in advance.
   6. Services in the amount of $4,000 were performed during the year; these services have not yet been billed or recorded.
   7. A written off debt of $10,000 was recovered on 31 December 20X7 but not recorded.
   8. The firm accounts for impairment of accounts receivables under FRS 109 Financial Instruments, i.e. the firm computes the lifetime expected credit losses of its accounts receivables and makes an allowance for impairment losses (if required), at every year end. The allowance for impairment losses of $4,000 was brought forward from last year. At the end of this financial year, the provision matrix prepared by the firm estimated the amount of accounts receivables not expected to be collected and that amount happens to be equivalent to 10% of the final Accounts Receivable balance.
   9. Salaries at $400 per day per employee for 5 employees over a period of 3 days, had not been paid nor recorded as at 31 December 20X7.

Required:

1. Using the information above, prepare and record all necessary journal entries and annual adjusting entries that are required at the end of the financial period. Journal narratives are not required. (20 marks)

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