End-Of-Period Adjustment

At 1 December 2007, the following ledger balances were brought forward in Jane Saunders books
of account:
£
Rent receivable 1,800 Cr
Rent payable 6,000 Dr

Rent receivable was £600 per month for the period 1 December 2007 to 28 February 2008 and rent
payable was £1,000 per month for the period 1 December 2007 to 31 May 2008.

The following cheques were received during 2008:

£
1 March Rent receivable (for 6 months to 31 August 2008) 4,000
1 September Rent receivable (for 6 months to 28 February 2009) 4,800

The following cheque was paid during 2008:

1 June Rent payable (for one year to 31 May 2009) 12,000

REQUIRED
For the year ended 30 November 2008, make the entries in the following ledger accounts, showing
the amounts prepaid/accrued at 1 December 2008:
(a) Rent Receivable.
(b) Rent Payable.

Sam Bell commenced his business on 1 January 2005. On that date, he purchased a motor vehicle by
cheque for £15,000. He decided to depreciate this asset at the rate of 20% per annum, using the
reducing balance method.

REQUIRED
(c) Prepare the Accumulated Depreciation of Motor Vehicle account for the years ended 31
December 2005,2006,2007 and 2008. Bring down the balances at the end of each financial
(d) State one method of depreciation apart from the reducing balance method.
(e) Copy the sentence below in your answer book and write in the missing words:

The charge for deprecation is posted to the __________ side of the Depreciation Expense account
and the ___________ side of the Accumulated Depreciation account

Answer Guide: (a) RM8,200 (Inc) (b) RM12,00 (Exp)

(c) 2005 RM3,000; 2006 RM2,400; 2007 RM1,920; 2008 RM1,536