Question

Q.5. Business Services Ltd. was set up on January 2013. Its trial balance on January 31, 2013 was as follows [10] Business Services Ltd. Trial Balance, January 31, 2013 Amount in Rs. Credit Debit 15000 12000 2140 16-40 630 3600 ELE Particulars Buildings Office squipment Office supplies Trade receivables (debtors) Cash Prepaid rent Trade payables (creditors) Unearned revenue Share capital Dividends Revenue from services (sales) Salaries expense Electricity expense Total 1020 1600 20000 16870 SHELL 3100 380 139490 39490 The following additional information is available. 1. The building is expected to be useful for 10 years and the office equipment has an estimated useful life of four years. None of these assets are expected to have any salvage value 2. The inventory of office supplies on January 31, 2013 is Rs.970 3. Services for Rs 900 were provided to customers in January and bills have been raised 4. Services for Rs. 720 were provided to customers who had made full advance payments 5. Salaries of stal for the second fortnight totaling Rs. 3100 have not been paid 6. The telephone company sent a bill for Rs. 480 for January after the close of the month's transactions 7. The company paid six months' rent as advance on January 1, 2013 You are required to 1. Prepare adjusting entries and post them to the Taccounts (Ledgers) 2. Prepare an adjusted trial balance and final accounts

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Answer 1

Business Services Ltd. Adjusting Enteries Trans. Particulars Debit in $ Credit in $ i Depreciation Expense a/c Dr. 125 To Accum. Depre - Build 125 (To record depreciation) 15000 / ( 10 x 12) 250 Depreciation Expense a/c Dr. To Accum. Depre - Off. Equip. (To record depreciation) 12000/(4 x 12) 250 1170 Supplies expense a/c Dr. To Supplies (Supplies expensed) 2140 - 970 1170 Adjusted Trial Balance For the period ending 31.1.2017 Particulars Cash Trade Receivable Office Supplies Prepaid Rent Buildings Accum. Depre - Build Office Equipment Accum. Depre - Off. Equip. Trade Payable Salary Payable Unearned service revenue Share Capital Dividends Service revenue Salaries Expense Electricity Expense Depreciation Expense Supplies expense Telephone Expense Rent Expense Totals Debit in $ Credit in $ 630 2540 970 3000 15000 125 12000 250 1500 3100 880 20000 1000 18490 6200 380 375 1170 480 600 44345 44345 900 Trade Receivable a/c Dr. To Service revenue (Service on account) 900 4 720 Unearned service revenue a/c Dr. To Service revenue (Revenue earned) 720 I 5 Dr. 3100 Salary Expense a/c To Salary Payable (Salary accrued) 3100 Dr. 480 Telephone Expense a/c To Trade Payable (Expense accrued) 480 7 Dr. 600 Rent Expense a/c To Prepaid Rent (Rent Expensed) 600

Accum. Depre - Build Accum. Depre- Off. Equip. Depreciation Expense 125 250 Bal. Bal. Salary Payable Salaries Expense 3100 3100 Bal. 375 375 6200 6200 375 6200 125 3100 Accum. Depre - Build Depreciation Expense 125 125 Salary Payable Salaries Expense 3100 3100 Bal. Bal. 3100 Office Supplies Trade Payable Supplies expense 1170 Bal. 1170 Telephone Expense 480 Bal. 480 1170 1170 480 480 Bal Office Supplies 2140 Supplies expense Bal. 2140 1170 970 2140 Trade Payable Bal. 1500 Telephone Expense 1500 Bal. 1020 480 1500 Prepaid Rent Bal Service revenue Trade Receivable 1640 900 Bal. 2540 Rent Expense 600 Bal. 600 2540 2540 600 600 Prepaid Rent 3600 Rent Expense Bal. Service revenue Bal. Trade Receivable 18490 Unearned service revenue 18490 Bal. 16870 900 720 18490 600 3000 3600 Bal. 3600 1600 Service revenue Bal. Unearned service revenue 720 Bal. 880 1600 1600

18490 Statement of Income For the period ending 31.1.2017 Service revenue Less: Salaries Expense 6200 Electricity Expense 380 Depreciation Expense 375 Supplies expense 1170 Telephone Expense 480 Rent Expense 600 Net Income 9205 9285 Statement of Retained Earnings For the period ending 31.1.2017 Net Income 9285 Dividends -1000 8285

Amounts Amounts Balance sheet As at 31.1.2017 Assets Current Assets Cash Trade Receivable Office Supplies Prepaid Rent Amounts Amounts Liabilities Current Liabilities 630 Trade Payable 2540 Salary Payable 970 Unearned service revenue 3000 7140 1500 3100 880 5480 Non Current Assets Buildings Accum. Depre- Build Office Equipment Accum. Depre - Off. Equip. Total Assets 15000 -125 12000 -250 14875 Shareholders Equity Share Capital 11750 Retained Earnings 33765 Total Liabilities & Equity 20000 8285 28285 33765