AF101 Semester 1, 2015 Mid Semester Test

QUESTION 32 ACCOUNTING CYCLE 30 Marks

The trial balance of Marist Enterprises as at the year ended 30 April, 2015 was as follows:

Marist Enterprises
Unadjusted Trial Balance as at 30 April 2015

Debit Credit
$ $
Cash at Bank 7 780
Accounts Receivable 21 700
GST receivable 2 600
Prepaid rent 2 100
Prepaid insurance 2 730
Office supplies 4 020
Office equipment 12 200
Accumulated dep. – office equipment 2 470
Accounts payable 2 800
Unearned fees 1 100
Loan payable-due 2016 9 200
GST payable 8 060
Capital 16 600
Drawings 52 000
Fees revenue 138 400
Salaries expense 57 200
Telephone expense 6 100
Rent expense 10 200
$178 630 $178 630

The following additional information is available at the end of the financial year. IGNORE GST

1. Interest owing on the loan payable, charged at 5% on the balance owing at the end April.

2. A physical count of office supplies on 30 April shows $560 of unused supplies on hand.

3. Marist Enterprises has provided services for half the amount in the Unearned Fees account by the
end of the financial year.

4. At March 31st, Marist Enterprises had paid up its rent of $700 per month to their landlord for the
months of April, May and June.

5. Of prepaid insurance, 80% has expired in the current financial year.

6. The office assistant earns $280 a day. He will be paid in May for the 5-day period ending 2nd May.

7. The telephone expense for April of $670 has not been recorded or paid. No tax invoice has been
issued.
REQUIRED:

A. Write the journal entries to record all the necessary balance day adjustments. Narrations
are not required. Clearly show any necessary calculations.
(9.5 marks)
B. Assume that closing journal entries are raised at the end of April. Close only the
necessary entries required to determine profit/loss for the period.
Narrations are not required.
(9 marks)
C. Using the journal entries in (B) above, construct and balance 1 Ledger Account, which
will calculate Net Profit for the period. Use the T-account format.

(5.5 marks)
D. Prepare appropriate reversing journal entries. Narrations are not required.
(3 marks)

E. Briefly explain what type of adjusting entries needs to be reversed, when and why.
(3 marks)

~The End~