Introduction

The name of the company is ABC Law Firm and the owners who represents the ABC Law Firm are
A, B, C and D. ABC Law Firm falls under a service industry and it basically provides consultancy and file lawsuit
The starting date of business was 1 December 2021. The total capital invested in business was AED 33000
The company is located near HSBC Tower, Dubai.

Unadjusted Trial Balance

ABC LAW FIRM
Unadjusted Trial Balance
For the year
Debit Credit
Consulting revenue 15000
Personnel expenses 5000
Professional expenses 2500
Marketing expenses 2450
Equipment 25000
Land 15000
Prepaid insurance 4500
Supplies 3050
Cash 15000
Prepaid rent 1500
Capital 33000
Drawings 3000
Account payable 15000
Salaries payable 6000
Long term loan 5000
Unearned revenue 3000
77000 77000
Transactions for making adjustment entries
1) service provided on credit of AED 2000, but not yet recorded
2) Supplies of AED 2500 were in hand during the year end
3) Prepaid insurance of AED 1500 has been expensed.
4) Equipment will be depreciated on 10% straight line method
5) Salaries of 700 has been accrued
6) Professional expenses of 750 has been accrued at year end
7) Consulting services given to a customer of 2200 for which the customer has already paid
8) Prepaid rent of AED 150 has been expensed

Journal entries for adjusted transactions

Debit Credit
1 Account recievable 2000
Consulting revenue 2000
 2 Supplies expense 2500
Supplies 2500
3 Insurance 1500
Prepaid insurance 1500
4 Depreciation (Equipment) 2500
Accumulated Depreciation 2500
5 Salaries 700
Salaries payable 700
6 Professional expenses 750
Professional expenses payable 750
7 Unearned revneue 2200
Consulting revenue 2200
8 Rent 150
Prepaid rent 150

Adjusted Trial Balance

ABC LAW FIRM
Adjusted Trial Balance
For the year
Debit Credit
Consulting revenue 19200
Personnel expenses 5000
Professional expenses 3250
Marketing expenses 2450
Equipment 25000
Land 15000
Prepaid insurance 3000
Supplies 550
Cash 15000
Prepaid rent 1350
Capital 33000
Drawings 3000
Account payable 15000
Salaries payable 6700
Long term loan 5000
Unearned revenue 800
Account receivable 2000
Supplies expense 2500
Insurance 1500
Depreciation 2500
Accumulated depreciation 2500
Salaries expense 700
Professional expenses payable 750
Rent 150
82950 82950
Income Statement ABC LAW FIRM
Income Statement
For the year ended 31 dec
Consulting revenue 19200
Less: Expenses
Personnel expenses 5000
Professional expenses 3250
Marketing expenses 2450
Supplies expense 2500
Insurance 1500
Depreciation 2500
Salaries expense 700
Rent 150 18050
Profit for the year 1150

Statemnent of changes in Equity

Capital Retained earnings
Balance at start of the year 33000
Issued shares - -
Purchase of treasury stock - -
Net income 1150
Dividends -
Balance at year end 33000 1150

Balance Sheet
ABC LAW FIRM
Balance Sheet
For the year ended 31 dec
Non current assets
Equipment 22500
Land 15000
Total non current assets 37500

Current assets
Prepaid insurance 3000
Supplies 550
Cash 15000
Prepaid rent 1350
Account receivable 2000
Total current assets 21900
Total Assets 59400
 Equity and Liabilities
Non current liability
Long term loan 5000

Current Liabilities
Account payable 15000
Unearned revenue 800
Salary payable 6700
Professional expenses payable 750
Total current liabilities 23250

Total Liabilities 28250

Equity
Capital 33000
Profit for the year 1150
Drawings 3000
31150
Total Liabilities and Equity 59400

Conclusion :
From the above statements it can be seen that during the year ABC LAW FIRM made the profit of AED 11
and the total equity has been decreased from 33000 to 31150 due to change in profit and drawings
drawings were made by the owner of AED 3000.
While preparing the balance sheet of the company, first of all non current and current assets were bifurc
non current and current liabilities have been bifurcated. Current assets are assets which can be used for
whereas non current assets can be used for more than an year. Similarly current liabilities are due for les
current liabilities are those payments which are due for more than one year
ncy and file lawsuit
was AED 33000
Total
33000
-
-
1150
-
34150
made the profit of AED 1150
profit and drawings

urrent assets were bifurcated and then

ts which can be used for less than one accounting period
liabilities are due for less than one accounting period and noo