Below is the trial balance of Mobile Phone Services Ltd, prior to adjustment, and the adjustments which must be made at balance sheet day:

The following adjustments are to be made. a The prepaid rent figure includes $1,200 which relates to the month just completed. b The prepaid insurance is for a policy which has just expired. Since this is the first year of operation and no monthly adjustments have been made, there has been no adjustment made so far for depreciation. All assets have been owned for the full year and it is assessed that the equipment will be usable for ten years. No resale value is assumed. d Salaries owing at balance date are $1,200. e Supplies still on hand at balance date cost $800. f An amount of $1,000 included in the deposits received relates to a contract which has just been completed. g $800 is receivable from a sub-tenant for rent. h One month's interest on the bank loan is provided for at 15 percent per annum. i Five percent of the trade debtors are considered to be doubtful.

Required Show the adjusting journal entries for Mobile Phone Services Ltd and prepare the profit and loss account and the balance sheet as at 30 June 20x6 for the same company.

Transcribed Image Text:

Mobile Phone Services Ltd Trial balance as at 30 June 20x6 Debit Credit $ $ Cash Trade debtors Prepaid rent 26,400 8,400 1,800 Prepaid insurance Supplies Equipment Trade creditors 1,100 2,400 42,200 6,800 Revenue received 92,600 Loan payable 6,000 Capital - Alesha Dixon 28,000 Drawings Alesha Dixon 12,000 Deposits received 2,400 Salaries expense 28,000 Rent expense 8,400 Electricity expense 3,400 Advertising expense 1,700 135,800 135,800