QUESTION 3 Nish Kumar Services Company started business on 1 January 2020 with a capital of RM120,000. The company manages condominiums for owners (Service Revenue) and rents out space in its building (Rental Revenue). The Trial Balance and the Adjusted Trial Balance at the end of the first year are as follows: Nish Kumar Service Company Worksheet For the year ended 31 December 2020 Account Expected Balance Adjusted Trial Balance RM RM RM RM Cash 14,500 14,500 Debtors 23,600 23,600 Prepaid Insurance 3,100 1,400 Land 56,000 56,000 Building 106,000 106,000 Equipment 49,000 49,000 Creditors 10,400 10,400 Rental Income Not Received 5,000 2,800 Unpaid Leases 100,000 100,000 Capital, N.Kumar 120,000 120,000 Ambilan, N.Kumar 20,000 20,000 Service Results 75,600 75,600 Rental Results 24,000 26,200 Salary Spending 30,000 30,000 Advertising Spend 17,000 17,000 Utility Shopping 15,800 15,800 Amount 335,000 335,000 Insurance Shopping 1,700 Depreciation Expenses - Buildings 2,500 Accumulated Depreciation - Buildings 2,500 Depreciation Expenses - Equipment 3,900 Accumulated Depreciation - Equipment 3,900 Interest Expenses 9,000 Interest Unpaid 9,000 Amount 350,400 350,400 Be required: a) Complete the Worksheet above. b) Prepare a tiered Statement of Financial Position as at 31 December 2020 (Note: RM10,000 from Lease Payable is due next year). 4 c) Prepare adjustment journal entries. d) Prepare closing notes on 31 December 2020. e) Prepare Trial Balance After Closing on 31 December 2020. SECTION B 1. Information to prepare the trial balance is taken from a. pay slip b. ledger account c.journal entries d. business documents 2. After the adjustment entries are journalized and posted to the ledger account the balance in each account should be in line with the balance shown in: a. adjusted predictive balance b. trial balance after closing C. Journal d. adjustment columns in the worksheet 3. If the number of debit columns exceeds the number of credit columns in the financial statement column on the worksheet, this means: a. the company generates a net profit b. an error occurs because the debit amount is not equal to the credit amount c. the company suffered a loss d. adjustment notes need to be made 4. Income Summary Account is a. permanent account b. items in the Statement of Financial Position C. items in the Comprehensive Income Statement d. temporary account 5. A closing note is necessary for a. permanent accounts only b. temporary accounts only c. permanent and temporary accounts d. permanent accounts or real accounts only 6. Income Summary is done a. to terminate the company's business. b. so that all assets, liabilities and capital of the owner have a balance of zero when the next accounting period begins. 5 C. so that the net profit (or loss) and withdrawals are transferred to the owner's capital account. d. so that a comprehensive Income Statement can be prepared. 7. Closing Notes a. prepared prior to the Statement of Comprehensive Income b. reducing the number of permanent accounts causing the revenue and expenditure account to have a balance of zero d. summarize the activity in each account 8. Closing notes may be provided from information in the following sources EXCEPT: a. adjusted balance in the ledger account b. income statement in worksheet column C. statement of financial position d. income statement and owner's capital The following is information from the Archer Enterprise Company Income Statement for the month ended June 30, 2018: 100 RM RM Results 7,000 Shopping Spend the salary 3,000 Rent shopping 1,000 Spend on advertising 800 Shopping for supplies 300 Insurance expenses Total spending 5,200 Net profit 1,800 9. With reference to the Income Statement of Archer Enterprise Company above, the entry to close the revenue account is included a. debit summary income RM1,800 b. income summary credit of RM1,800. c. debit summary income RM7,000. d. income summary credit of RM7,000. 10. Referring to the Income Statement of Archer Enterprise Company above, the entry to close the expense account is included a. debit summary income RM1,800. b. rental expense credit of RM1,000. c. income summary credit of RM5,200. d. salary expenditure debit of RM3,000