Question

Below is an unadjusted Trial Balance prepared by Wendy Donald for her business. Wendy is a Financial Consultant.

Trial Balance of Wendy Donald

for the year ended 30 June, 2019

Account	A/c No	Debit	Credit
Cash at Bank		5 200
Accounts Receivable		9 260
Office Supplies		1 140
Land		60 000
Building		152 000
Accumulated Depreciation – Building			64 000
Office Equipment		23 400
Accumulated Depreciation – Office Equipment			6 420
Accounts Payable			7 960
Unearned Consulting Fees			1 560
GST Collected			2 000
GST Paid		920
Mortgage Payable			88 600
W Donald, Capital			71 490
W Donald, Drawings		52 780
Consulting Fees Revenue			156 860
Salaries and Wages Expense		87 940
Telecommunications Expense		1 740
Electricity Expense		760
Insurance Expense		1 660
Interest Expense		2 090
		$398 890	$398 890

Catherine’s Chart of Accounts also includes the following additional account titles:

• Prepaid Insurance
• Accrued Expense Payable
• Office Supplies Expense
• Depreciation Expense – Buildings
• Depreciation Expense – Office Equipment

The following information is also available:

1.    A physical count of office supplies reveals that supplies totalling $420 are on hand at 30 June.

2.    The balance in the Unearned Consulting Fees account includes $1200 earned for services rendered in the last week of June.

3.    Estimated depreciation on the office equipment is $2140. Depreciation on the building is $8760.

4.    A 12-month insurance policy was purchased on 1 April for $780.

5.    The June monthly mortgage payment of $900 has not been paid or recorded. In each payment, $220 is attributable to interest.

6.    The June telecommunications costs for $320 are unrecorded. No tax invoice has been received.

7.    Salaries of $980 were owing to employees at 30 June 2020.

Required

A.        Prepare necessary adjusting entries and adjusted trial balance at the end of 30 June 2019.

B.        Prepare the Statement of Profit or Los for the period ending 30 June 2019.

C.        Prepare the Balance Sheet as of 30 June 2019.

Answer 1

		ADJUSTING ENTRIES
	Ref	Account Titles	Debit	Credit
	1	Office Supplies Expense	720		(1140-420)
		Office Supplies		720
	2	Unearned Consulting Fees	1200
		Consulting Fees Revenues		1200
	3	Depreciation expense-Building	8760
		Depreciation expense-Office Equipment	2140
		AccumulatedDepreciation -Building		8760
		AccumulatedDepreciation -Office Equipment	2140
	4	Prepaid Insurance	585		(780*(9/12)
		Insurance expense		585
	5	Interest expense	220
		Accrued expense payable		220
	6	Telecommunication expense	320
		Accrued expense payable		320
	7	Salaries and wages expense	980
		Accrued expense payable		980