ACCOUNTING 1

AA015
SESSION 2021/2022
CHAPTER 5
TOPIC: ADJUSTMENTS AT THE END OF ACCOUNTING PERIOD

QUESTION 1
Below is the unadjusted trial balance of Zainal Advertising owned by En Zainol for
the month ended December 2020.
Zainal Advertising
Unadjusted Trial Balance
As At December 31, 2020
Debit (RM) Credit (RM)
Cash 4,320
Accounts receivable 2,500
Office supplies 360
Prepaid insurance 480
Office equipment 6,800
Accumulated depreciation - office equipment 1,200
Accounts payable 1,400
Unearned revenue 920
Capital 9,740
Drawings 800
Consultation revenue 5,800
Salary expenses 3,000
Rent expenses 800
TOTAL 19,060 19,060

Additional information:
1. Insurance for the month of December was RM80.
2. Office supplies on December 31 were RM150.
3. Depreciation expense of office equipment for the current month was RM200.
4. Accrued salary for December was RM240.
5. Services rendered were RM600 but the bills were yet to be sent to the clients.
6. In December, RM320 services were rendered to customer who already made
the payment in advance.

REQUIRED:
a) Prepare Adjusting Journal Entries on December 31, 2020.
b) Prepare an Adjusted Trial Balance as at December 31, 2020.

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QUESTION 2
Below is the Trial balance for Perniagaan Siti Arnee as at December 31, 2020:

Accounts Debit(RM) Credit(RM)

Akaun
Capital ( January 1, 2020) 29,713
Opening Inventories ( January 1, 2020) 15,400
Fixture and Fittings 10,000
Bank 8,800
Utilities Expenses 3,462
Purchases Discounts 420
Rent Expenses 6,600
Salary Expenses 7,680
Purchases 23,970
Freight In 210
Sales 46,210
Purchases Returns 545
Accounts Payable 5,874
Accounts Receivable 4,840
Insurance Expenses 1,800
82,762 82,762

Additional Information:

1. There was still unpaid worker’s salary of RM1,000.

2. Rent expense of RM600 was for January 2021.
3. Insurance expense was for a year starting July 1, 2020.
4. December’s telephone bill of RM430 was still unpaid.
5. The sales amount had taken into account a deposit of RM1,200 from a customer.
The goods will only be delivered to the customer in January 2021.
6. Commission revenue of RM500 for the month of December 2020 was still not
received.

REQUIRED:

a) Prepare Adjusting Journal Entries on 31 December 2020.

b) Prepare an Adjusted Trial Balance as at 31 December 2020.

QUESTION 3
Below is the trial balance for Perniagaan Keledang as at June 30, 2020 :

Accounts Debit (RM) Credit (RM)

Cash 21,000
Accounts receivable 17,500

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Supplies ( July 1, 2019) 9,800
Equipment 80,000
Accounts payable 9,000
Notes payable 9,000
Unearned revenue 5,400
Rent revenue 6000
Capital ( July 1, 2019) 100,000
Drawings 12,000
Service revenue 126,300
Commission revenue 11,600
Salary expenses 74,000
Utilities expenses 9,000
Prepaid insurance 36,000
Delivery expenses 8,000
267,300 267,300

Additional Information :
1. Insurance paid was for a period of one year starting March 1, 2020.
2. The business’s premise was rented out for RM1,200 a month starting January 1,
2020. The tenant had still not paid the rent for the month of June.
3. On June 1, 2020, customers had paid deposits amounting RM5,400 to place
order for services. The services rendered until June 30, 2020 were RM2,000.
4. Unpaid utilities for the month of June 2020 were RM200.
5. Supplies on hand as at 30 June 2020 were RM1,800.

REQUIRED :
a) Prepare adjusting journal entries on 30 June 2020.
b) Prepare an Adjusted Trial Balance as at 30 June 2020.
c) Prepare a Profit or Loss Statement for the year ended 30 June 2020.

QUESTION 4
Perniagaan Zaimah is selling Muslimah clothing and hijabs. Below is the Trial
Balance as at 30 June 2020.

Accounts Debit (RM) Credit (RM)

Cash 15,200
Accounts Receivable 8,500
Opening Inventories (1/7/2019) 5,000
Vehicles 80,000

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Accumulated Depreciation – Vehicles 16,000
Accounts Payable 18,000
Capital 51,800
Drawings 5,000
Sales 70,000
Purchases 35,000
Sales Returns and Allowances 2,700
Purchases Returns and Allowances 2,200
Sales Discounts 500
Purchases Discounts 1,200
Freight In 800
Freight Out 1,600
Wages On Purchases 500
Insurance Expenses 1,200
Interest Revenue 1,100
Salary Expenses 5,500
Rent Revenue 1,200
161,500 161,500

Additional Information:
1. Closing inventories on June 30, 2020 were RM6,300.
2. Prepaid insurance was RM800.
3. Salary expense of RM500 for the month of June 2020 was still not yet paid and
recorded.
4. Rent revenue of RM400 was for the month of July 2020.
5. Interest revenue of RM200 was still not yet received.
6. One of the debtors was declared bankrupt and his debt of RM400 became bad
debt.
7. Purchases discount of RM200 was recorded as purchases returns and
allowances.
8. Depreciation expense for vehicles was RM16,000.

REQUIRED :
a) Prepare adjusting journal entries on 30 June 2020.
b) Prepare an Adjusted Trial Balance as at 30 June 2020.
c) Prepare a Profit or Loss Statement for the year ended 30 June 2020.

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QUESTION 5
Shown below are the account balances of Yusuf Yaakub Enterprise for the year
ended 31 December 2020 :
Accounts RM
Capital (January 1, 2020) 60,000
Van Office 10,000
Accumulated depreciation – Van Office 2,000
Office equipment 15,000
Accumulated depreciation – Office equipment 3,000
Opening inventories (January 1, 2020) 37,000
Cash 8,900
Purchases 180,000
Sales 250,000
Bad Debts 300
Accounts receivable 50,000
Accounts payable 16,450
Insurance expenses 500
Received discounts 750
Salary expenses 23,500
Sales returns 2,500
Miscellaneous expenses 2,500
Purchases returns 500
Drawings 2,500

Additional Information :
1. Inventories on December 31, 2020 were RM25,000.
2. Prepaid insurance was RM200.
3. Cash drawings were RM1,000.
4. Bad debts written off were RM650.
5. Miscellaneous expenses accrued were RM250.
6. Van was depreciated at 20% per annum using reducing balance method.
7. Office equipment was depreciated at 10% per annum using straight line method.
8. Salaries payable were RM1,200.
REQUIRED :

a) Prepare a Profit or Loss Statement for the year ended 31 December 2020.
b) Prepare a Statement of Financial Position as at 31 December 2020.

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QUESTION 6

Perniagaan Bella Vista is selling assorted decorating lights. Below is the Unadjusted
Trial Balance as at 31 December 2020.

Accounts Debit (RM) Credit (RM)

Cash 107,640
Office Supplies 1,000
Accounts Receivable 96,600
Opening Inventories (1/1/ 2020) 83,200
Insurance Expenses 5,800
Prepaid Rent 5,760
Land 320,000
Building 220,000
Accumulated Depreciation-Building 66,000
Office Equipment 111,200
Accumulated Depreciation-Office Equipment 22,240
Accounts Payable 75,800
Capital 440,360
Sales 1,103,000
Sales Returns and Allowances 4,000
Sales Discounts 7,400
Purchases 625,800
Purchases Returns and Allowances 2,800
Purchases Discounts 5,200
Freight In 14,600
Interest Revenue 800
Advertising Expenses 24,000
Salary Expenses 76,000
Delivery Expenses 9,200
Utilities Expenses 4,000
1,716,200 1,716,200

Additional Information:
1. Depreciation expenses:
Building RM4,400
Office Equipment RM16,680
2. Salary expense for the month of December for 5 workers and a supervisor were
still accrued. The monthly salary for the supervisor was RM2,000, while for the
workers was RM1,200 each. These will be paid in early January 2020.

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3. Prepaid insurance for 2020 was RM800. This insurance policy will expire on
February 1, 2021.
4. On February 1, 2020, Perniagaan Bella Vista had paid rent expense for 12
months and had debited prepaid rent account.
5. Perniagaan Bella Vista had bought office supplies totaling RM1,000 on June 3,
2020. Unused office supplies remaining on December 31 were RM250.
6. Delivery expense of RM500 was wrongly recorded in freight in account.
7. Physical counting showed that the closing inventories on 31 December 2020 were
RM111,000 on hand.

REQUIRED :
a) Prepare Adjusting Journal Entries on 31 December, 2020.
b) Prepare a Profit or Loss Statement for the year ended 31 December 2020.
c) Prepare an Owner’s Equity Statement for the year ended 31 December 2020.
d) Prepare a Financial Position Statement as at 31 December 2020.

QUESTION 7
Below is the unadjusted trial balance for Perniagaan Kuswadi as at 31 December
2020.

Perniagaan Kuswadi
Adjusted Trial Balance As At 31 December 2020
RM RM
Capital 17,075
Drawings 629
Beginning inventories 500
Purchases 3,500
Sales 6,000
Salary expenses 1,800
Sales returns 25
Purchases returns 20
Sales discounts 100
Purchases discounts 80
Rent expenses 1,138
Birds food and medicine expenses 162
Freight in 120
Sundry expenses 812
Accounts receivable 2,050
Accounts payable 1,080
Shop equipment 2,840
Van 3,000
Cash 7,579
TOTAL 24,255 24,255
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Additional information:
1. Inventories on December 31, 2020 were RM700.
2. Personal expense of RM15 was recorded in sundry expenses.
3. Rent expense of RM200 for January 2021 was included in the rent expenses.
4. Clerk’s accrued salary for the month of December was RM400.
5. Fixed assets were depreciated at 5% on their cost values.

REQUIRED:
a) Prepare adjusting journal entries on 31 December 2020
b) Prepare a Profit or Loss Statement for the year ended 31 December 2020.
c) Prepare an Owner’s Equity Statement for the year ended 31 December 2020.
d) Prepare a Financial Position Statement as at 31 December 2020.