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In: Accounting

PT ABC is preparing its 4th quarter 2019 financial report (3 month period ended 31 December...

PT ABC is preparing its 4th quarter 2019 financial report (3 month period ended 31 December 2019), assuming the adjusting entries are recorded at the end of the period. PT ABC’s transactions in 2019 are:

  • ● PT ABC has a bank payable of Rp. 10 billion since the end of 2018. The interest rate is 12% (no discount or premium). Interest is paid every July 1 and January 1.

  • ● PT ABC provided consulting services to PT Q in December 2019. Consulting services were completed according to the contract as of December 30, 2019. The fee for consulting services is IDR 50 million and was billed in the first week of January 2020. PT ABC has not recognized any revenue for the consulting services in 2019.

  • ● PT ABC purchased office supplies for IDR 120 million in the 4th quarter of 2019 (purchase has been recorded as assets). The initial balance of office supplies (as of October 1, 2019) is IDR 10 million. Based on the results of a physical examination of the balance of office supplies at the end of 2019, it was valued at IDR 30 million.

  • ● PT ABC purchased office furniture for IDR 170 million in early July of the current year. Office furniture is depreciated using the straight-line method with a useful life of 4 years and a residual value of Rp 10 million.

  • ● On November 1, 2019, PT ABC received a down payment of IDR 120 million (100% of the value of the agreement) for consulting services to be provided for 3 months from December 1, 2019 with a total of 30 hours of consultation (PT ABC recorded cash receipts and unearned revenue in November 1, 2019) every month for 3 months. PT ABC will provide consulting services for 10 hours in 2019. PT ABC has provided consulting services for December according to the agreement.

    Instruction: ​Help PT ABC prepare its adjusting entries related to the 4th quarter financial report that ended December 31, 2019.

Solutions

Expert Solution

Hey learner! if you have any doubt regarding this answer, feel free to ask me so that i can help you better.

Following are the adjusting entries for the given transactions.

ekkarill92 answered 1 year ago
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