On 1 February 2022, Linda established Linda Consulting. She contributed office equipment worth $20,000 and cash amounting $50,000 to the business. She also managed to get her parents to lend her $100,000 to her business. She does not have to pay interest and will repay her parents 5 years later. During the first month of operations, her business experienced the following events: 1 Feb. Purchased $5,000 office supplies on account. 1 Feb. Paid $30,000 to advertise the business for 3 months (Feb – Apr). The ads will appear on the last day of the month. 1 Feb. Paid $20,000 for rent for 4 months. 1 Feb. Linda Consulting officially opened for business. 5 Feb. Received $25,000 from AA Pte Ltd as advance payment for services to be performed next month. 10 Feb. Returned the office supplies purchased on 1 Feb. 20 Feb. Received $50,000 from BB Pte Ltd for completion of services. 25 Feb. Linda obtained a $500,000 loan from a bank to finance the purchase of her condominium apartment. 28 Feb. Paid $5,000 to full-time employees and owed $3,000 to part-time employees. 28 Feb. Received a utility bill of $200. The bill will be paid next month. 28 Feb. Depreciation of office equipment is determined to be $500. Required: (a) Analyse the above and record the necessary entries. Narration is not required. (b) Present the trial balance of Linda Consulting as of 28 February 2022. (c) From the trial balance, compute the following and show the workings: (i) Total assets. (ii) Total liabilities. (iii) Net profit.
On 1 February 2022, Linda established Linda Consulting. She contributed office equipment worth $20,000 and cash amounting $50,000 to the business. She also managed to get her parents to lend her $100,000 to her business. She does not have to pay interest and will repay her parents 5 years later.
During the first month of operations, her business experienced the following events:
1 Feb. Purchased $5,000 office supplies on account.
1 Feb. Paid $30,000 to advertise the business for 3 months (Feb – Apr). The ads will appear on the last day of the month.
1 Feb. Paid $20,000 for rent for 4 months.
1 Feb. Linda Consulting officially opened for business.
5 Feb. Received $25,000 from AA Pte Ltd as advance payment for services to be performed next month.
10 Feb. Returned the office supplies purchased on 1 Feb.
20 Feb. Received $50,000 from BB Pte Ltd for completion of services.
25 Feb. Linda obtained a $500,000 loan from a bank to finance the purchase of her condominium apartment.
28 Feb. Paid $5,000 to full-time employees and owed $3,000 to part-time employees.
28 Feb. Received a utility bill of $200. The bill will be paid next month.
28 Feb.
Required:
(a) Analyse the above and record the necessary entries. Narration is not required.
(b) Present the
(c) From the trial balance, compute the following and show the workings:
(i) Total assets.
(ii) Total liabilities.
(iii) Net profit.
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