Question

Below is an Unadjusted Trial Balance of Jasa Tading Bhd at 31 December 2019.

	Dr. (RM)	Cr. (RM)
Account receivables	109,658
Buildings	1,372,680
Cash	1,314,264
Cost of goods sold	856,152
Equipment	504,000
Patent	60,276
Income tax expense	60,340
Inventory	551,950
Land	766,800
Maintenance and repair expenses	11,953
Office expense	14,086
Prepaid insurance	48,000
Property tax expense	1,680
Salaries and wages expenses	25,334
Sales returns and allowance	1,176
Accounts payable		36,936
Accumulated depreciation – buildings		137,268
Accumulated depreciation - equipment		252,000
Deferred tax liability		21,600
Gain on revaluation of properties		29,640
Gain on sale of land		109,560
Gain on translation of foreign operations		5,880
Notes payable		194,400
Rent revenue		57,600
Retained earnings		912,720
Revaluation reserve		560,640
Translation of foreign operations reserve		263,160
Sales revenue		2,238,180
Share capital		878,765
	5,698,349	5,698,349

Additional information:

1. An unpaid salaries and wages as at 31 December 2019 is RM18,000.
2. A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
3. The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
4. The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
5. Payment for a one-year insurance coverage was made on 1 July 2019.
6. Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
7. 30% of the notes payable is due next year. The note payable interest rate is 8% per annum.

REQUIRED:

1. Journalise the adjusting entries on 31 December 2019.

Answer 1

Date	Accounts and Explanation	Debit	Credit
Dec 31	Salaries and wages expenses	18,000
	Salaries and wages payable		18,000
Dec 31	Accounts receivable	3,000
	Rent revenue		3,000
Dec 31	Accounts payable	3,500
	Inventory		3,500
Dec 31	Sales revenue	35,000
	Unearned sales revenue		35,000
Dec 31	Insurance expense	24,000
	Prepaid insurance		24,000
	(48,000 x 1/2)
Dec 31	Depreciation expense - building	27,454
	Accumulated depreciation – buildings		27,454
	(1,372,680/50)
Dec 31	Depreciation expense - equipment	50,400
	Accumulated depreciation – equipment		50,400
	(504,000/10)
Dec 31	Interest expense	15,552
	Interest payable		15,552
	(194,400 x 8%)