the financial r following are unadjusted accounts bala Ques year ended 31 Decemb

Question

the financial r following are unadjusted accounts bala Ques year ended 31 December 2016: Hon don RM 66,705 155,655 16,200 32,550 25,200 110,000 22,000 86,710 233,400 Accounts Cash Account receivable fift fo Office supplies Prepaid Rental Prepaid insurance Building Accumulated depreciation- Building Unearned revenue Capital Service revenue 122,040 57,840 Salary expense Additional information: 1. Unearned revenue as at 31 December 2016 was 46,71 Rent expense is RM2,000 per month. Rent expense for 2. 3. 4. the last six months 2016 were still unrecorded. Supplies on hand at 31 December 2016 amounted to RM8,000 Salary expense for December 2016 was RM3,000. Accrual It has not yet been recorded and will only be paid in January 2017. Prepaid insurance represented premiums for policy purchased on 1 July 2016 for a period of one year. Depreciation of office equipment is based on the 5. 6. pee straight-line method. The office equipment has an estimated useful life of ten years without salvage value. c Required: (a) ecc Prepare the relevant adjusting journal entries. Prepare the adjusted trial balance as at 31 December 2016. (b)

Explanation / Answer

Solution:

Part 1 --- Adjusting Entries

Transaction

Date

General Journal

Debit

Credit

1)

Dec.31, 2016

Unearned Revenue (86,710 - 46710)

40000

Service Revenue

40000

2)

Dec.31, 2016

Rent Expense

12000

Prepaid Rent (2000*6)

12000

3)

Dec.31, 2016

Supplies Expense (16200 - 8000)

8200

Office Supplies

8200

4)

Dec.31, 2016

Salary Expense

3000

Salary Payable

3000

5)

Dec.31, 2016

Insurance Expense (25,200/2)

12600

Prepaid Insurance

12600

6)

Dec.31, 2016

Depreciation Expense (110,000 / 10)

11000

Accumulated Depreciation - Building

11000

Part 2 --- Adjusted Trial Balance as at Dec 31, 2016

ADJUSTED TRIAL BALANCE

DEC.31, 2016

Adjusted Trial Balance

Debit

Credit

Cash

66705

Accounts Receivable

155655

Office Supplies (16,200 - 8200)

8000

Prepaid Rental (32,550 - 12000)

20550

Prepaid Insurance (25,200 - 12600)

12600

Building

110000

Accumulated Depreciation - Building (22,000 + 11,000)

33000

Salary Payable

3000

Unearned Revenue

46710

Capital

233400

Service Revenue (122,040 + 40,000)

162040

Rent Expense

12000

Insurance Expense

12600

Supplies Expense

8200

Salary Expense (3000 + 57840)

60840

Depreciation Expense

11000

Totals

$478,150

$478,150

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Transaction

Date

General Journal

Debit

Credit

1)

Dec.31, 2016

Unearned Revenue (86,710 - 46710)

40000

Service Revenue

40000

2)

Dec.31, 2016

Rent Expense

12000

Prepaid Rent (2000*6)

12000

3)

Dec.31, 2016

Supplies Expense (16200 - 8000)

8200

Office Supplies

8200

4)

Dec.31, 2016

Salary Expense

3000

Salary Payable

3000

5)

Dec.31, 2016

Insurance Expense (25,200/2)

12600

Prepaid Insurance

12600

6)

Dec.31, 2016

Depreciation Expense (110,000 / 10)

11000

Accumulated Depreciation - Building

11000

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