Accounting Example Essay

1446 words - 6 pages

Workshop 5 Questions and Solutions
PSA3.2
The unadjusted trial balance at 30 June 2017 for Maxi Services Ltd is as follows.

MAXI SERVICES LTD Trial balance as at 30 June 2017
No. Account name   Debit     Credit  
100 Cash $ 54 800
104 Accounts Receivable 15 000
112 Prepaid Insurance 3 200
113 Supplies 1 500
130 Office Equipment 30 000
131 Accumulated Depreciation $ 20 000
200 Accounts Payable 7 400
213 Service Revenue Received in Advance 4 000
300 Share Capital 60 000
310 Retained Earnings 7 500
400 Service Revenue 46 800
500 Salaries Expense 34 000
510 Rent Expense 2 000
515 Insurance Expense 1 ...view middle of the document...

(e) If the business wanted to report a higher profit which of the adjusting entries above would be avoided? Which stakeholders would be affected by the misreported profit?
PROBLEM SET A 3.2 Solution
(a)
Maxi Services Ltd
General Journal
Date Account Name (narration) Post Ref. $
Debit $
Credit
2017 Supplies on hand at 30 june totals $1000
1. Supplies expense 505 500
supplies 113 500
(supplies used 1500-1000)
2. An electricity bill for june has not been recorded and will not be paid until next month
Electricity expense 530 300
Electricity payable 218 300
3. 30 The balance of the prepaid insurance account is the annual premium for insurance commencing 1 January 2017
Insurance expense 515 1600
Prepaid insurance 112 1600
4. 30 jun 17 Services were performed during the current period in relation to $3000 of revenue received in advance
Revenue received 213 3000
Service revenue 400 3000
5. 30 Salaries of $4600 are owed at 30 june
Salary expense 500 4600
Salary payable 215 4600
6. 30 Depreciation expense for the year is $4000
Depreciation expense 520 4000
Accumulated depreciation 131 4000
7. 30 Invoices representing $4,400 of service performed during the month have not been recorded as of 30 june 2017
Service revenue 104 4400
Accounts receivable 400 4400
(accrued revenue)

(b) MAXI SERVICES LTD GENERAL LEDGER

Cash 100
30/6 Opening Balance 54 800

Accounts Receivable 104
30/6 Opening Balance 15 000
30/6 Service Revenue 4400

1/7 Opening balance 19,400

Prepaid Insurance 112
30/6 Opening Balance 3 200


Supplies 113
30/6 Opening Balance 1 500


1/7

Office Equipment 130
30/6 Opening Balance 30 000

Accumulated Depreciation 131
30/6 30/6 Opening Balance 20 000


1/7

Accounts Payable 200
30/6 Opening Balance 7 400

Service Revenue Received in Advance
213
30/6 Opening Balance 4 000



Salaries Payable 215



Electricity Payable 218


Share Capital 300


Retained Earnings 310


Service Revenue
400
30/6 Opening Balance 46 800



Salaries Expense 500
30/6 Opening balance 34 000


Supplies Expense 505
30.6 Supplies expense 500

Rent Expense 510
30/6 Opening Balance 2 000

Insurance Expense 515
30/6 Opening Balance 1 200

Depreciation Expense 520

Electricity Expense 530
30/6 Opening balance 4 000

Maxi Services Ltd
Adjusted Trial Balance
as at 30 June 2017
No. Account name Debit $ Credit $
100 Cash 54800
104 Accounts Receivable 19400
112 Prepaid Insurance 1600
113 Supplies 1000
130 Office Equipment 30000
131 Accumulated...

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