Question

On 31 December 2019, the following trial balance was extracted from the books of Syarikat Afif Resources:
Accounts   Debit (RM)   Credit (RM)
Capital       29,250
Drawings   4,600  
Cash   9,200  
Salaries and Wages   23,000  
Rental Revenue       68,000
Land   35,000  
Accounts Receivable   12,350  
Accounts Payable       18,000
Office Expenses   2,500  
Utility Expenses   1,700  
Prepaid Insurance   1,400  
Building   15,000  
Office Equipment   2,300  
Vehicles   4,200  
Inventory   4,100  
Unearned Rental Revenue       500
Depreciation Expenses   400  
   115,750   115,750
  
Additional information for adjustment at the end of the period is as follows:
i)   Salaries and wages accrued amounted to RM5,000.
ii)   Insurance premium expired for the year amounted to RM700.
iii)   Unearned rental revenue was RM350.
iv)   Utility bills amounted to RM200 were received but not yet paid.

You are required to answer the following questions:
a)   Prepare the adjusting entries needed on 31 December 2019.

b)   Prepare an adjusted trial balance as at 31 December 2019.

Answer 1

A)

Adjusting entries

Serial number	Accounts title and explanation	Debit($)	Credit($)
(i)	Salaries and wages	5,000
	Accrued Salaries and wages		5,000
	[Salaries and Wages expense due but not paid ]
(ii)	Insurance expense	700
	Prepaid insurance		700
	[Prepaid Insurance exhausted ]
(iii)	Unearned rental revenue	150
	Rental revenue		150
	[Unearned rental revenue adjusted rental revenue ]
(iv)	Utility expenses	200
	Accrued utility expense		200
	[Utility expense due but not paid ]

B)

Adjusted Trial balance

December 31, 2019

Accounts title	Debit	Credit
Capital		29,250
Drawings	4,600
Cash	9,200
Salaries and wages [23,000 + 5,000]	28,000
Accrued salaries and wages		5,000
Rental revenue [ 68,000 + 150]		68,150
Land	35,000
Accounts receivable	12,350
Accounts payable		18,000
Office expenses	2,500
Utility expenses [ 1,700 + 200]	1,900
Accrued utility expenses		200
Prepaid insurance [ 1,400 - 700]	700
Insurance expense	700
Building	15,000
Office equipment	2,300
Vehicles	4,200
Inventory	4,100
Unearned rental revenue		350
Depreciation expenses	400
Total =	120,950	120,950