Question

K-Natty Co. ltd. Has the following financial statement at the beginning of 2019.

K-Natty C0.ltd

Statement of Financial Position

At 31^st December 2018

Account name	Account no.	Debit	Credit (Unit: USD)
Cash	101	920,500	-
Receivables	102	574,500	-
Inventory	103	774,003	-
Land	104	600,000	-
Equipment	105	134,000	-
Accumulated depreciation-Equipment	106		13,400
Accounts payable	201		500,000
Notes payable	202		116,000
Common stock	301		1,700,000
Retained Earnings	303		673,603
Total		3,003,003	3,003,003

*The equipment has a depreciation rate of 10% per year

Land Improvement 107: Machinery 108: Depreciation 501: Loss on disposal of asset 502:

During 2019, these following transactions took place:

Jan 1, purchased a land at a price of $190,000 by issuing $190,000 Note Payable which turns maturity on 31 December 2020, with interest rate 12%. The company spent the transfer fee on the amount of $10,000, by cash.

Feb 1, paying for the construction of a fence in the amount of $250,000 with 20% trade discount. The machine is expected to be used in the production department for 50,000 hours. After that, the residual value will be $50,000. The company depreciates the machine according to working hours.

Dec 31, beginning equipment was no longer used.

Dec 31, adjusting entries, the company spent 2,000 hours in the production department.

Required: Journal entries for the transaction during 2019.

T-Account

Trial balance at 31^st December 2019.

I got almost everything for the journal entries except loss on disposal of asset, accumulated depreciation and equipment. I also need help to do the T-account and trial balance at 31st dec 2019

Answer 1

JOURNAL ENTRIES

LEDGER ACCOUNTS

TRIAL BALANCE AS AT 31ST DEC 2019:

PLEASE COMMENT ON IT IF ANY INFORMATION IS MISSING AND FOR CONCEPTUAL CLARITY