You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiserinvolved in the business of selling baking utensils and equipment. On January 1st, 2018 you wereappointed to the position of Chief Financial Officer which made you responsible for themaintenance of the company’s accounting records, internal control and preparation of the financialstatements. The following trial balance was extracted from the books of Peter Pan Ltd, at June30, the end of the company’s fiscal year.Peter Pan LtdTrial Balance as at June 30, 2018 The following additional information is available at June 30, 2018:(i) Eight (8) months’ rent amounting to $280,000 was PAID IN ADVANCE on January1, 2018A/C Name DR $ CR $Cash 440,000 Accounts Receivable 530,000Allowance for Bad Debts 40,000 Merchandise Inventory 320,000Store Supplies 10,000 Prepaid Rent 280,000Furniture and Equipment 600,000Accumulated Depreciation -Furniture and Equipment 120,000 Accounts Payable 145,000Wages PayableNotes Payable, Long-Term 510,000Unearned Sales Revenue 260,000Peter Pantry, Capital 1,900,000 Peter Pantry, Withdrawal 75,000 Sales Revenue Earned 1,095,000Cost of Goods Sold 645,000 Wages Expense 525,000Rent Expense 210,000Utilities Expense 230,000Depreciation Expense -Furniture and EquipmentStore Supplies Expense 160,000Bad debt ExpenseInterest Expense 45,000 Total 4,070,000 4,070,000ACCT1002 – Introduction to Financial Accounting Final Assignment Page | 4(ii) The Furniture and equipment is being depreciated over 10 years on the doubledeclining balance method of depreciation, down to a residue of $80,000.(iii) Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018.(iv) A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventoryon hand.(v) On January 1, 2018 the company received $260,000 IN ADVANCE for sales to beprovided evenly from January 1, 2018, through October 31, 2018. None of the revenuefrom this client has been recorded.(vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that theAllowance for Bad-Debts should be $65,000.Required:a) Prepare the necessary adjusting journal entries on June 30, 2018. [Narrations are notrequired]b) Prepare the company’s multiple-step income statement for the year ended June 30, 2018.c) Prepare the company’s statement of owner’s equity for the year ended June 30, 2018.d) Prepare the company’s classified balance sheet as at June 30, 2018.
You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser
involved in the business of selling baking utensils and equipment. On January 1st, 2018 you were
appointed to the position of Chief Financial Officer which made you responsible for the
maintenance of the company’s accounting records, internal control and preparation of the financial
statements. The following
30, the end of the company’s fiscal year.
Peter Pan Ltd
Trial Balance as at June 30, 2018
The following additional information is available at June 30, 2018:
(i) Eight (8) months’ rent amounting to $280,000 was PAID IN ADVANCE on January
1, 2018
A/C Name DR $ CR $
Cash 440,000
Allowance for
Store Supplies 10,000 Prepaid Rent 280,000
Furniture and Equipment 600,000
Wages Payable
Notes Payable, Long-Term 510,000
Unearned Sales Revenue 260,000
Peter Pantry, Capital 1,900,000 Peter Pantry, Withdrawal 75,000 Sales Revenue Earned 1,095,000
Cost of Goods Sold 645,000 Wages Expense 525,000
Rent Expense 210,000
Utilities Expense 230,000
Depreciation Expense -Furniture and Equipment
Store Supplies Expense 160,000
Bad debt Expense
Interest Expense 45,000 Total 4,070,000 4,070,000
ACCT1002 – Introduction to Financial Accounting Final Assignment Page | 4
(ii) The Furniture and equipment is being depreciated over 10 years on the doubledeclining balance method of depreciation, down to a residue of $80,000.
(iii) Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018.
(iv) A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory
on hand.
(v) On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be
provided evenly from January 1, 2018, through October 31, 2018. None of the revenue
from this client has been recorded.
(vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the
Allowance for Bad-Debts should be $65,000.
Required:
a) Prepare the necessary
required]
b) Prepare the company’s multiple-step income statement for the year ended June 30, 2018.
c) Prepare the company’s statement of owner’s equity for the year ended June 30, 2018.
d) Prepare the company’s classified
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