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  • Chapter 6 Class Exercise (1) (1) - Old

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    Tiffany Chance
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    The document contains 5 examples of accounting transactions involving prepaid expenses, accrued expenses, and adjusting journal entries. Example 1 shows a journal entry for rates expense with an accrued amount owing at the start and end of the period. Example 2 shows a motor expenses journal entry with an accrued amount at the start of the period and a prepaid amount at the end. Example 3 shows a rent expense entry with a prepaid amount at the start and an accrued amount at the end. Example 4 shows an insurance expense entry spanning two years with a prepaid amount at both the start and end. Example 5 shows a water and electricity expense entry with prepaid amounts at both the

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    Chapter 6 Class Exercise(1) (1)-Old

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    The document contains 5 examples of accounting transactions involving prepaid expenses, accrued expenses, and adjusting journal entries. Example 1 shows a journal entry for rates expense with an accrued amount owing at the start and end of the period. Example 2 shows a motor expenses journal entry with an accrued amount at the start of the period and a prepaid amount at the end. Example 3 shows a rent expense entry with a prepaid amount at the start and an accrued amount at the end. Example 4 shows an insurance expense entry spanning two years with a prepaid amount at both the start and end. Example 5 shows a water and electricity expense entry with prepaid amounts at both the

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    5 views22 pages

    Chapter 6 Class Exercise (1) (1) - Old

    Uploaded by

    Tiffany Chance
    The document contains 5 examples of accounting transactions involving prepaid expenses, accrued expenses, and adjusting journal entries. Example 1 shows a journal entry for rates expense with an accrued amount owing at the start and end of the period. Example 2 shows a motor expenses journal entry with an accrued amount at the start of the period and a prepaid amount at the end. Example 3 shows a rent expense entry with a prepaid amount at the start and an accrued amount at the end. Example 4 shows an insurance expense entry spanning two years with a prepaid amount at both the start and end. Example 5 shows a water and electricity expense entry with prepaid amounts at both the

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 22

    Example 1

    Wages and salaries paid to 31 December 2011 amount to RM55,640 by cheque. However, at the end date which is on 31 D
    What figures should appear for Wages and Salaries in the company’s financial statements for the year ended 31st Decemb

    Dt Wages and Salaries Ct

    Example 2
    Amit started business on 1 January 2012, and during the year to 31st 2012, he made the following payments in respect of
    31st March 2012 : RM500 for the 3 months from Jan-March
    30th June 2012: RM600 for the 3 months from Apr-June
    30 Sept 2012: RM750 for the 3 months from July to Sept.
    At 31st December, he received the telephone bill RM 950 for 3months from Oct-Dec, but no payment has been made.
    What figures should appear forTelephone Bills in the company’s financial statements for the year ended 31st December 20

    Dt Telephone Bill Ct
    31-Mar Bank 500 1-Dec Inc Stat 2800
    30-Jun Bank 600
    30-Sep Bank 750
    31-Dec Accrual c/d 950
    2,800 2800
    1-Jan Accrual b/d 950

    Example 3
    The following details are available:
    (A) On 31 December 2014, three months’ rent amounting to a total of RM3,000 was owing
    (B) The following rent payments were made in the year 2015 by cheque: 6 January RM3,000 (is for Accrued payment last y
    (C) The final three months’ rent worth RM3,000 for 2015 is still owing
    What figures should appear for Rent in the company’s financial statements for the year ended 31st December 2015?

    Dt Ct
    Example 4
    The following details are available:
    (A) During the year to 31 December 2015, we paid RM27,480 for packing materials by cheque
    (B) On 31 December 2015, we still owed RM2,750 for packing materials already received and used.

    Dt ct
    the end date which is on 31 Dec 2011 RM1,120 is owing: this amount is paid on 4 January 2012.
    r the year ended 31st December 2011?

    Income Statement for the year ending 31/12/2011

    owing payments in respect of Telephone Bills by cheque:

    payment has been made.


    year ended 31st December 2012?

    Income Statement for the year ending 31/12/2012

    GP
    Less:Expenses
    Telephone Bills (1850 + 950) 2,800

    (is for Accrued payment last year); 4 April RM3,000; 7 July RM3,000; 18 October RM3,000

    ed 31st December 2015?

    Income Statement for the year ending 31/12/2015


    Income Statement for the year ending 31/12/2015
    nding 31/12/2011 Financial Position as at 31/12/2011

    Current Liability
    Accrued Wages and Salaries

    Financial Position as at 31/12/2012

    Current Liability
    Accrual telephone bill 950

    Financial Position as at 31/12/2015

    Current Liability
    Financial Position as at 31/12/2015
    t 31/12/2011

    1,120
    Example 1
    Karen started business on 1st Jan 2010. During the year to 31st Dec 2010, she made the following payment for Insurance by ch
    5 January RM800 for 6 months to June 2010
    20 July RM2000 for 10 months to Apr 2011 : Jan, Feb, Mar, Apr
    What figures should appear for insurance in the company’s financial statements for the year ended 31st December 2010?
    Dt Ct
    5-Jan Bank 800 31-Dec Inc Stat 2000
    20-Jun Bank 2000 31-Dec Prepaid c/d (2000-200 x 4) 800

    2800 2800
    1-Jun Prepaid b/d 800

    Example 2
    On Jan 1, 2015, Company β pays 140,000 for insurance up to February 2016 by cheque . Company β’s financial year ends on 3
    What figures should appear for insurance in the company’s financial statements for the year ended 31st December 2015?
    Dt Insurance
    1-Jan Bank 140,000 31-Dec Inc Stat
    31-Dec Prepaid c/d

    140,000
    1-Jan Prepaid b/d 20,000

    Example 3

    At 1 Jan 2014 a company had prepaid insurance of RM8,200 by cheque (For duration from Jan- June). Another payment has b
    What figures should appear for insurance in the company’s financial statements for the year ended 31st December 2014?

    Dt Insurance
    prepaid b/d 8,200 Inc Stat
    Bank 36,000 Prepaid c/d
    44,200
    prepaid b/d 18000

    Example 4
    Stationery bought in the year RM2,200 by cheque
    Stock of stationery on hand (unused stationery) as at 31 December 2015 is RM400
    What figures should appear for stationery in the company’s financial statements for the year ended 31st December 2015?

    Dt
    wing payment for Insurance by cheque

    n, Feb, Mar, Apr


    ended 31st December 2010?
    Income Statement for the year ending 31/12/2010

    gross profit xx
    Less: expenses
    insurance (2800-800) 2,000

    pany β’s financial year ends on 31st December every year


    ended 31st December 2015?
    Ct Income Statement for the year ending 31/12/2015
    120,000
    20,000 gross profit xx
    Less: expenses
    140,000 Insurance 140000-20000 120,000

    n- June). Another payment has been made on 1 July 2014 worth RM36,000 for insurance for the year to 30th June 2015.
    ended 31st December 2014? 3000

    Ct
    26,200
    18,000 Income Statement for the year ending 31/12/2014
    44,200
    Gross Profit xx
    Less : Asset
    Insurance (44200 - 18000) 26,200

    ended 31st December 2015?

    Ct Income Statement for the year ending 31/12/2015


    Financial Position as at 31/12/2010

    Current Asset
    Insurance Prepaid 800

    Financial Position as at 31/12/2015

    Current Asset
    Insurance prepaid 20000

    h June 2015.

    Financial Position as at 31/12/2014

    Current Asset
    Insurance prepaid 18000

    Financial Position as at 31/12/2015


    Current Asset
    a. Dt Rates Ct
    cash 4000 accrualb/d 700
    accrual c/d 800 inc stat 4100

    accrued b/d 800

    b Dt Motor Expenses Ct
    Bank 2540 Accrual b/d 600
    Inc Stat 1790
    Prepaid c/d 150

    2540 2540
    Prepaid b/d 150

    c Dt Rent Ct
    Prepaid b/d 300 Inc Stat 16,200
    bank 15,000
    Accrued c/d 900

    16200 16200

    Dt Insurance Ct
    d 1-Jan Prepaid b/d 150 31-Dec Inc Stat 10,700
    31-Dec Bank 10,700 Prepaid c/d 150

    10,850 10,850

    e Dt Water and Electricity Ct


    1-Jan Prepaid b/d 200 31-Dec Inc Stat 30,400
    1-Jan Cash 30,000
    1-Jan Acrual c/d 200
    30,400 30,400
    1-Jan Acrued b/d 200
    Question 1

    Question 2
    Question 3
    RM RM RM
    RM RM

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