Question

1. Flamingo, a limited liability company, has an accounting year end of 31 December. The accountant is preparing the financial statements as at 31 December 2019 and requires your assistance. The following unadjusted trial balance has been extracted from the general ledger.

account	Dr	Cr
Plant & Equipment at cost	370,000
Plant & Equipment accumulated depreciation, 1 Jan 2019		30,000
Building at cost	110,000
Building accumulated depreciation, 1 Jan 2019		55,000
Prepaid rent	30,000
Bank balance		35,000
Revenues		915,000
Supplies	15,000
Purchases	555,000
Inventory at 1 Jan 2019	80,000
Cash	10,000
Account Payable		125,000
Account Receivable	170,000
Salaries expense	62,500
Electricity Expense	25,250
Telephone expense	45,000
Insurance expense	29,750
Loan due (December 2029)		15,000
Retained earnings at 1 Jan 2019		65,000
Common stock, $1		235,000
Unearned Revenues		40,000
Dividend paid	12,500

The following additional information is also available:

1. The rent prepayment covers three years from July 1, 2019
2. Employee salaries of $1,500 are owed for the last three days of the year
3. The balance in Supplies after a physical count reveals $7,000of supplies on hand on December 31, 2019
4. Plant and equipment has a useful life of 10 years with a salvage value of $20,000
5. Building has a useful life of 50 years with no salvage value
6. Unearned Revenue tickets show that $14,000 of the trial balance amount has been earned by December 31, 2019
7. Closing inventory after a physical count amounted to $87,500

Required: Prepare for Flamingo Ltd.

1. The journal entries required for the additional information
2. The adjusted trial balance (in good form)
3. The income statement for the year ended
4. The statement of retained earnings
5. The balance sheet as at the year end

Answer 1