Question 2

The following is an extract from Power Agencies. Complete the General Journal entries to record the

balance day adjustments, which appear below.

Power Agencies Trial Balance (extract) as at 30 June 2018	Debit	Credit
Commission received		137 900
Advertising	6 000
Office salaries	18 600
Inventories (1 July 2017)	8 000
Motor Vehicle	27 000
Accumulated Depreciation of Motor Vehicle		3 000
Rent Revenue		9 700
Office Equipment	14 000
Accumulated Depreciation of Office		4 000
Stationery	1 600
JB Were Bonds (Investment Asset)	15 000

1. Advertising includes a contract for $3 000 paid on 1 March 2018. This contract is for advertising on Rabbit Pay TV for a six month period ending 30 August 2018

2. Rent revenue includes a figure of $800, representing rent received in advance

3. Office salary owing amounts to $900

4. JB Were Bonds earn interest at a rate of 6% per annum. $900 interest is owing on balance day.

5. Office Equipment is expected to have a useful life of 6 years with a residual value of $2 000. The straight line method of depreciation is used.

6. Depreciation of Motor Vehicle is 10% per year using the diminishing balance method

Show:

1. General Journal entries for the adjustments above,
2. The adjusted figures in the trial balance with any new accounts required

(1) General Journal

Date	Particulars	Debit	Credit

(2) Adjusted Trial Balance

Power Agencies Trial Balance (extract) as at 30 June 2008	Debit	Credit
Commission received
Advertising
Office salaries
Inventories (1 July 2017)
Motor Vehicle
Accumulated Depreciation of Motor Vehicle
Rent Revenue
Office Equipment
Accumulated Depreciation of Office
Stationery
JB Were Bonds (financial asset) Prepaid Expense Prepaid Revenue Accrued Expense Accrued Revenue Depreciation on Office Equipment Depreciation on Motor Vehicle Interest Revenue