Melina started her own consulting firm, “ACE ACCOUNTING” on 1 April 201X. The un
ID: 2328402 • Letter: M
Question
Melina started her own consulting firm, “ACE ACCOUNTING” on 1 April 201X. The unadjusted trial balance as at 30/04/201X before adjusting entries is as follows
An analysis of the accounts shows the following:
i) The prepaid rent of $20,000 was paid on the 1 April for a period of 5 months.
ii) $3,000 of supplies had been used during the month.
iii) The vehicle is depreciated at 1% per month.
iv) Employees’ salaries of $2,000 are accrued and unpaid at the end of the month.
Required:
a) Record the adjustments for the month in the general journal.
b) Prepare an adjusted trial balance for the month.
c) prepare income statement, balance sheet
ACE ACCOUNTING Unadjusted Trial Balance as at 30/04/201X Dr (S)Cr() Accounts Cash Accounts receivable Prepaid rent Supplies GST Paid Vehicle Accounts payable GST Collected Bank loan Capital Drawings 64,230 2,600 20,000 4,000 2,470 10,000 4,400 600 35,000 60,000 2,000 6,000 ervice revenue Utilities expense TOTALS 700 106,000 106,000Explanation / Answer
Answers
Adjustments
Accounts title
Debit
Credit
(i)
Rent Expense
$ 4,000.00
Prepaid Rent
$ 4,000.00
(1 month rent: 20000/5: expired and recorded)
(ii)
Supplies expense
$ 3,000.00
Supplies
$ 3,000.00
(Supplies consumed during the month)
(iii)
Depreciation expense
$ 100.00
Accumulated Depreciation
$ 100.00
(depreciation recorded for 1 month: 10000 x 1% per month)
(iv)
Salaries expenses
$ 2,000.00
Salaries Payable
$ 2,000.00
(Salaries accrued to be paid, not yet paid)
Adjusted Trial Balance, along with workings
Unadjusted Trial Balance
Adjustments
Adjusted Trial Balance
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$ 64,230.00
$ 64,230.00
Accounts receivables
$ 2,600.00
$ 2,600.00
Prepaid Rent
$ 20,000.00
$ 4,000.00
$ 16,000.00
Supplies
$ 4,000.00
$ 3,000.00
$ 1,000.00
GST Paid
$ 2,470.00
$ 2,470.00
Vehicle
$ 10,000.00
$ 10,000.00
Accumulated Depreciation
$ 100.00
$ 100.00
Accounts Payable
$ 4,400.00
$ 4,400.00
GST Collected
$ 600.00
$ 600.00
Bank Loan
$ 35,000.00
$ 35,000.00
Salaries Payable
$ 2,000.00
$ 2,000.00
Capital
$ 60,000.00
$ 60,000.00
Drawings
$ 2,000.00
$ 2,000.00
Service revenue
$ 6,000.00
$ 6,000.00
Utilities expenses
$ 700.00
$ 700.00
Rent Expense
$ 4,000.00
$ 4,000.00
Supplies expenses
$ 3,000.00
$ 3,000.00
Depreciation expense
$ 100.00
$ 100.00
Salaries expenses
$ 2,000.00
$ 2,000.00
TOTALS
$ 106,000.00
$ 106,000.00
$ 9,100.00
$ 9,100.00
$ 108,100.00
$ 108,100.00
Income Statement
Revenues:
Service revenue
$ 6,000.00
Expenses:
Utilities expenses
$ 700.00
Rent Expense
$ 4,000.00
Supplies expenses
$ 3,000.00
Depreciation expense
$ 100.00
Salaries expenses
$ 2,000.00
Total Expenses
$ 9,800.00
Net Income (Loss)
$ (3,800.00)
Balance Sheet
ASSETS
LIABILITIES
Cash
$ 64,230.00
Accounts Payable
$ 4,400.00
Accounts receivables
$ 2,600.00
GST Collected
$ 600.00
Prepaid Rent
$ 16,000.00
Bank Loan
$ 35,000.00
Supplies
$ 1,000.00
Salaries Payable
$ 2,000.00
GST Paid
$ 2,470.00
Total Current Assets
$ 86,300.00
Total Liabilities
$ 42,000.00
EQUITY
Vehicle
$ 10,000.00
Capital
$ 60,000.00
Accumulated Depreciation
$ (100.00)
$ 9,900.00
Net Income (Loss)
$ (3,800.00)
Drawings
$ (2,000.00)
Ending Owner's Equity
$ 54,200.00
Total Assets
$ 96,200.00
Total Liabilities & Equity
$ 96,200.00
Adjustments
Accounts title
Debit
Credit
(i)
Rent Expense
$ 4,000.00
Prepaid Rent
$ 4,000.00
(1 month rent: 20000/5: expired and recorded)
(ii)
Supplies expense
$ 3,000.00
Supplies
$ 3,000.00
(Supplies consumed during the month)
(iii)
Depreciation expense
$ 100.00
Accumulated Depreciation
$ 100.00
(depreciation recorded for 1 month: 10000 x 1% per month)
(iv)
Salaries expenses
$ 2,000.00
Salaries Payable
$ 2,000.00
(Salaries accrued to be paid, not yet paid)