Question 1
After graduation, Peter decided to start a printing service company, PK Pte Ltd (PKL) with his good friend Kelvin. The following were the transactions for the month of March 20X8.
- 1-Mar A total of $200,000 was invested into the business by Peter and Kelvin.
- 1-Mar The company took a 5-year bank loan of $120,000 with interest of 5% to be paid annually on 31 December.
- 1-Mar The company paid $144,000 for the rental of the office for two years.
- 3-Mar A printing equipment manufacturer was interested in the company. $90,000 worth of printing equipment was supplied to the company in exchange for shares in the company.
- 6-Mar The company purchased $8,500 of office supplies on credit term.
- 8-Mar The printing equipment was delivered, and the company paid $300 for the transportation. Since the amount was immaterial, the company treated the transportation fee as an expense.
- 9-Mar A customer paid a deposit of $2,000 for the printing of his company brochures.
- 12-Mar The job received on 9 March was completed and the company invoiced the customer $7,000 for the remaining payment.