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1 Home QUESTION 24 COMPLETE ACCOUNTING CYCLE Funny Drew Consultants adjusts and closes its accounts at the end of the financial year December 2018, the
1 Home QUESTION 24 COMPLETE ACCOUNTING CYCLE Funny Drew Consultants adjusts and closes its accounts at the end of the financial year December 2018, the following trial balance was prepared from the General Ledger 20 MARKS Funny Drew Consultants Unadjusted Trial Balance as at 31st December, 2018 Accounts Debit Cash Credit 12 540 960 1 600 20 000 Prepaid Dues & Subscriptions Supplies Equipment Accumulated Depreciation Equipment 200 5 000 35 650 10 000 Loan Uncarned Consulting Fees Hannah Drew, Capital Hannah Drew, Retained Earnings Hannah Drew, Drawings Consulting Fees Revenue 7040 27 000 90 860 Salaries Expenses Telephone Expense Rent Expense Interest Expense Insurance Expense Miscellaneous Expense 66 900 2 550 14 300 450 1 800 1 650 149,750.00 $149,750.00 The following additional information is available at the end of December: 1. On 1s December 2018, the firm signed a new rental agreement and paid three months' rent in advance at a rate of S1 100 per month. This advance payment was debited to the Rent Expense account. Dues and subscriptions expired during the year amounted to $710. A count of supplies on hand at 3 1st December was made, and revealed that cost of unused supplies was $450. 2. 3. 4. Accrued interest on the loan payable is $600 5. The company purchased a 12-month fire insurance policy on 31st May, 2018 for S1 800 and debited it to the Insurance Expense account. Page 11 of 12 me Pg Up Pg Dn End 6. Consulting services valued at $32 550 were rendered during the year for clients who 7. At 31st December, consulting services valued at $3 000 had been provided to clients but 8. The salaries are paid fortnightly (10 working days) and the fortnight ends on Friday 7th made payments in advance. no payments have been received from these clients as yet. January, 2019 where total salaries to be paid to employees is $16,800. Required: a) Prepare the journal entries to record all the necessary balance day adjustments (Provide workings. Narrations are not required) (15 marks) b) From your adjusting entries, prepare appropriate reversing journal entries. 5 marks) Suggested Time: 48 minutes] ~The End
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