EXERCISE (10 OCTOBER 2019)
Raihan & Associates is a legal firm. The unadjusted trial balance of Raihan & Associates at 31
December 2018 is as follows:
Raihan & Associates
Unadjusted Trial Balance
As at 31 December 2018
Accounts
Cash
Accounts Receivables
Office Supplies
Prepaid Insurance
Office Equipment
Accumulated Depreciation – Office Equipment
Building
Accumulated Depreciation – Building
Accounts Payable
Unearned Revenue
Capital
Service Revenue
Miscellaneous Expense
Drawings
Total
Debit
(RM)
148,500
77,500
4,500
18,000
75,000
Credit
(RM)
30,000
187,500
97,500
35,000
13,750
219,750
144,000
19,000
10,000
540,000
540,000
The following adjustments are not taken into account in the accounting period ended December
31, 2018:
i) Supplies on hand on December 31, RM3,375.
ii) Depreciation of office equipment is at the rate of 10% per year based on the Straight Line
Method. Depreciation of the building is at the rate of 5% on book value.
iii) Paid supplier on account, RM3,750.
iv) Unearned revenue represented the receipt on November 1, which is in advance for services
to be provided in three months.
v) Fees earned but unbilled on December 31 are RM37,500.
vi) Unpaid wages accrued on December 31 are RM3,375.
vii) Prepaid insurance represented for premiums on policies for the next six months starting
October 1, 2018.
REQUIRED:
(a)
(b)
(c)
(d)
(e)
(f)
Journalise and post the adjusting entries.
Prepare an adjusted trial balance as of 31 December 2018.
Journalise the closing entries.
Prepare the income statement for the year ended 31 December 2018.
Prepare the statement of owner’s equity for the year ended 31 December 2018.
Prepare the balance sheet as at 31 December 2018.
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