Question 2:

Afif Enterprise has operated since 1 January 2017. The following are the accounts balance of Afif Enterprise as at 31 December 2020:

Account	Balance (RM)
Cash	18,500
Accounts receivable	15,200
Prepaid insurance	2,400
Inventory at 31/12/2020	22,800
Office supplies	4,500
Prepaid advertising	3,400
Furniture & fittings	22,600
Accumulated Depreciation furniture & fittings	10,400
Unearned Sales revenue	3,700
Accounts payable	17,500
Long term loan	12,000
Capital - Afif	24,000
Sales revenue	42,000
Salaries expenses	5,800
Rental expenses	13,200
Utilities expenses	1,200

Additional information:

1. Furniture and fittings are depreciated at a rate of 10 per cent annually using the straight-line method.
2. The balance of office supplies on hand at the end of the year is RM2,500.
3. Rentals for the current year amounting to RM2,200 are not yet paid.
4. RM3,700 of the sales recorded are sales for January 2021. The customer has paid in advance; however, the goods will be delivered in January 2021.
5. Employees salary for December 2020 of RM3,300 is not yet paid.
6. Utility bill for December 2020 of RM350 has been received but is not yet paid.
7. The prepaid advertising includes RM300 for January 2021 advertisement.
8. Expired insurance for the year 2020 is RM1,200.
9. The accrued interest on the long-term loan until 31 December 2020 is RM900.

Based on the above information, you are required to:

1. Prepare an adjusted Trial Balance as at 31 December 2020

(12.5)

2. Prepare an Income Statement for the year ended 31 December 2020

(6)

3. Prepare a Balance Sheet as at 31 December 2020

(8.5)