Question

Required:

Complete the adjustment journal by indicating which account to debit and to credit.

No	Transaction	Account Dr	Account Cr
1.	Portion of prepaid insurance which has now expired (been used up)
2.	Revenue earned but not yet received or billed
3.	Insurance expense which has not been used up (there is still future cover)
4.	Portion of recognised revenue which is considered unearned
5.	Expenses incurred but not yet paid
6.	Revenue received in advance which is now earned

Question 2                                                                                                 18 Marks

From the information given below prepare the income statement, statement of owner’s equity and balance sheet (classify balance sheet entries)

	CUD SERVICES Trial Balance as at 31 December 2019
	Account		Debit $			Credit $
	Cash at bank Accounts receivable Office supplies Prepaid insurance Long-term bank loan Equipment Accumulated depreciation – equipment Accounts payable Capital Drawings Accounting services revenue Salaries expense Advertising expense Repairs expense Sundry expense Electricity expense Telephone expense Interest on bank loan expense			6 200 20 000 7 260 1 725 82 800 27 000 43 250 2 250 1 260 7 520 3 405 2 620     1 350			35 000 14 600 15 000 ? 126 500
				$			$

Income statement

Statement of owners’ equity

Balance sheet
Assets
Liabilities and Owner’s Equity

Question 3                                                                                                 10 Marks

Required:

Use the following information from the records of Preston Partners to prepare an income statement under the periodic inventory system for the year ended 30 June 2017.

Purchases Inventory, 1 July 2016 Inventory, 30 June 2017 Selling and distribution expenses Sales Purchases returns and allowances Sales returns and allowances Administrative expenses Freight inwards Finance expenses

186 600 13 860 12 920 45 420 268 860 4 420 6 220 16 460 3 180 2 020

Income statement

Answer 1

Ans-1

Ans-2

Completed Trial Balance (Capital is the Plug Amount)

Income Stament

Statement of Owner's Equity

Balance Sheet

Ans-3