Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

DEBIT $ CREDIT $ Prepaid advertising 30,000 Materials on hand 6,000 Prepaid rent 8,000 Term deposit Accumulated depreciation - Computers 10,000 Fees income 218,000 Prepaid

DEBIT

$

CREDIT

$

Prepaid advertising

30,000

Materials on hand

6,000

Prepaid rent

8,000

Term deposit

Accumulated depreciation - Computers

10,000

Fees income

218,000

Prepaid income

30,000

Term deposit

50,000

Equipment

20,000

Accumulated depreciation- Equipment

5,000

Electricity expense

12,000

Computers

40,000

The following information needs to be taken into account at the end of the financial year:

  1. $600 is owing for electricity supplied in December 2021.
  2. $30,000 advertising was prepaid on 1 October 2021 for the period ended 31 March 2022.
  3. A fee for work performed on account (credit) in December for $800 has not been recorded.
  4. The equipment has a useful life of 5 years and no scrap value. It is depreciated using the straight line method.
  5. The term deposit of $50,000 was invested on 1 November 2021 for 6 months at 3% interest per annum.
  6. 15 % of the prepaid income balance has been earned by 31 December 2021.
  7. The computers have an estimated life of 4 years and are depreciated using the diminishing value (reducing balance) method.
  8. At the end of the year, materials on hand are $2,000.

REQUIRED:

  1. Prepare the adjusting general journal entries as at 31 December 2021.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cash, Corruption And Economic Development

Authors: Vikram Vashisht

1st Edition

1032096888, 9781032096889

More Books

Students also viewed these Accounting questions