EXERCISE 2: ANALYZING BUSINESS TRANSACTION Encik Adam established Adam Consultancy a few years ago. The transactions for Decem- ber 2009 were as follows: Dec 1 Paid office rent for December, RM2,000. 4 Purchased office supplies for cash, RM1,200. 7 Purchased office equipment of RM5,000. Adam Consultancy paid cash of RM1,500 while the balance would be paid early next month. 10 Received cash RM2,500 from a client for services completed in November 2009. 11 Paid cash to creditors, RM1,600. 15 Recorded cash received from services rendered for the first half of the month, RM18,300. 18 Purchased used photocopying machine on account for RM3,500. 22 Adam withdrew cash for personal use, RM3,000. 28 Paid salaries for the month, RM2,500. 29 Paid utilities expense for the month, RM1,850. 31 Recorded cash received from services rendered for the second half of the month, RM7,400. 31 Recorded fees charged to clients on account for services performed in December, RM10,500. The account balances for Adam Consultancy as at December 1, 2009 were as follows: Debit Balances Credit Balances 42,000- 37,000 1,120 71,200 24,000 Cash Accounts Receivable Office Supplies Vehicle Office Equipment Accounts Payable Notes Payable Adam, Capital Adam, Drawing Fees Earned Salaries Expense Bent Expense Utilities Expens 21,960 10,000 43,760 6,000 170,000 56,000 6,000 2,400 245,720 245,720 Instructions 1. Journalize the transactions for December (explanation is not required). 2. Post the journal entries to the ledger. 3. Prepare a trial balance as at 31 December 2009. 4. Prepare Statement of Income Statement for 31 December 2009 5. Prepare Statement of Financial Position (Balance Sheet) for 31 December 2009