Question

Provided below is the unadjusted trial balance of Khan Autos followed by adjustments information;

KHAN AUTOS
Trial Balance
as at December 31, 2019
.	Dr.	Cr.
Bank/Cash ..........................	15,450
Debtors ......................	25,600
Spare parts ..............…	30,000
Office supplies ...........	13,200
Prepaid rent ................	12,000
Prepaid insurance .......	2,400
Workshop supplies expense	17,100
Creditors ..............		15,680
Service revenue		210,580
Unearned Revenue		45,000
Wages .........................	33,000
Store rent ....................	4,500
Utilities .......................	8,400
Office equipment ........	8,700
Land ............................	20,000
Loose tools ..................	18,910
Plant & machinery.......	200,000
Furniture & fixture ...…	12,000
Long Term Bank Loan		100,000
Capital		100,000
Drawings	50,000
	471,260	471,260

Other information that need adjustments for current period reporting,

1. The rent under the head of ‘prepaid rent’ was paid on July 1, 2019 for period of 12months.
2. The insurance premium was paid on May 1, 2019, and covered one year.
3. Wages of Rs. 5,000 for December 2019 were not yet paid.
4. Stores rent of Rs. 1,500 for was also due, the store is in separate location and therefore its rent is not included in prepaid rent above.
5. Electricity bill of Rs. 1,200 received on December 28, 2019, was due on January 10, 2020. It was not yet paid.
6. A loan of Rs. 100,000 was acquired on October 1, 2019 at 10% interest rate. Interest for current period is not yet paid.
7. The office supplies on hand were of Rs. 1450.
8. The workshop supplies of Rs. 12,450 were consumed during the period.
9. The spare parts on hand were of Rs. 8,500.
10. The value of loose tools was estimated as Rs. 16,570 by the accountant, the remaining balance shall be treated as expense.
11. Depreciation on plant and machinery is 20% on its cost and on furniture and fixture is 10% on its cost. (apply the percentage on original cost for depreciation)
12. Out of Rs 45,000 reported in unearned revenue Rs. 20,000 still remained unearned.

Requirements

1. Pass all necessary general journal entrees
2. Post the entrees to T-Accounts
3. Prepare Adjusted Trial Balance

Answer 1

1. Journal Entries:

S.No.	Particulars	Debit (Rs.)	Credit (Rs.)
a.	Rent Expenses [12,000 * 6/12]	6,000
	Prepaid Expenses		6,000
b.	Insurance Expenses [2,400/12 * 8]	1,600
	Prepaid Insurance		1,600
c.	Wages	5,000
	Wages Payable		5,000
d.	Store Rent	1,500
	Store Rent Payable		1,500
e.	Utility Expenses	1,200
	Utility Expenses Payable		1,200
f.	Interest Expense [100,000 * 10% * 3/12]	2,500
	Interest Payable		2,500
g.	Expenses [13,200 - 1,450]	11,750
	Office Supplies		11,750
h.	Expenses	4,650
	Workshop Supplies [17,100-12,450]		4,650
i.	Expenses [30,000 - 8,500]	21,500
	Spare Parts		21,500
j.	Expenses [18,910 - 16,570]	2,340
	Loose Tools		2,340
k.	Depreciation - Plant @ 20%	40,000
	Depreciation - Furniture @ 10%	1,200
	Plant & Machinery		40,000
	Furniture & Fixture		1,200
l.	Unearned Revenue [45,000 - 20,000	25,000
	Service Revenue		25,000

2. General Ledgers:

Particulars	Rs.	Particulars	Rs.
Prepaid Rent
Balance b/d	12,000	Rent Expense	6,000
		Balance c/d	6,000
	12,000		12,000
Rent Expenses
Prepaid Rent	6,000	P&L	6,000
	6,000		6,000
Insurance Expenses
Prepaid Insurance	1,600	P&L	1,600
	1,600		1,600
Prepaid Insurance
Balance b/d	2,400	Insurance Expense	1,600
		Balance c/d	800
	2.400		2,400
Wages
Balance b/d	33,000
Wages Payable	5,000	P&L	38,000
	38,000		38,000
Wages Payable
Balance c/d	5,000	Wages	5,000
	5,000		5,000
Store Rent
Balance b/d	4,500
Store Rent Payable	1,500	P&L	6,000
	6,000		6,000
Store Rent Payable
Balance c/d	1,500	Store Rent	1,500
	1,500		1,500
Utilities
Balance b/d	8,400
Utiliies Expenses Payable	1,200	P&L	9,600
	9,600		9,600
Utilities Expenses Payable
Balance c/d	1,200	Utilities	1,200
	1,200		1,200
Interest Expense
Interest Payable	2,500	P&L	2,500
	2,500		2,500
Interest Payable
Balance c/d	2,500	Interest Expense	2,500
	2,500		2,500
Expenses
Office Supplies	11,750
Workshop Supplies	4,650
Spare Parts	21,500
Loose Tools	2,340	P&L	40,240
	40,240		40,240
Office Supplies
Balance b/d	13,200	Office Supplies Expenses	11,750
		Balance c/d	1,450
	13,200		13,200
Workshop Supplies
Balance b/d	17,100	Workshop Supplies Expenses	4,650
		Balance c/d	12,450
	17,100		17,100
Spare Parts
Balance b/d	30,000	Spare Parts Expenses	21,500
		Balance c/d	8,500
	30,000		30,000
Loose Tools
Balance b/d	18,910	Loose Tools Expenses	2,340
		Balance c/d	16,570
	18,910		18,910
Depreciation Expense
Plant & Machinery	40,000
Furniture & Fixture	1,200	P&L	41,200
	41,200		41,200
Plant & Machinery
Balance b/d	200,000	Depreciation Expense	40,000
		Balance c/d	160,000
	200,000		200,000
Furniture & Fixture
Balance b/d	12,000	Depreciation Expense	1,200
		Balance c/d	10,800
	12,000		12,000
Unearned Revenue
Service Revenue	25,000	Balance b/d	45,000
Balance c/d	20,000
	45,000		45,000
Service Revenue
		Balance b/d	210,580
Balance c/d	235,580	Unearned Revenue	25,000
	235,580		235,580

3. Adjusted Trial Balance:

Particulars	Dr. (Rs.)	Cr. (Rs.)
Cash / Bank	15,450
Debtors	25,600
Spare Parts	8,500
Office Supplies	1,450
Prepaid Rent	6,000
Prepaid Insurance	800
Workshop Supplies	12,450
Creditors		15,680
Service Revenue		235,580
Unearned Revenue		20,000
Wages	38,000
Store Rent	6,000
Utilities	9,600
Office Equipment	8,700
Land	20,000
Loose Tools	16,570
Plant & Machinery	160,000
Furniture & Fixture	10,800
Long Term Bank Loan		100,000
Capital		100,000
Drawings	50,000
Rent Expense	6,000
Insurance Expense	1,600
Interest Expense	2,500
Interest Payable		2,500
Depreciation Expense	41,200
Wages Payable		5,000
Utilities Payable		1,200
Store Rent Payable		1,500
Expenses	40,240
TOTAL	481,460	481,460