As at 30 June 2019, the unadjusted trial balance of Green Ltd was noted as follows:   Green Ltd TRIAL BALANCE AS AT 30 JUNE 2019   Accounts Debit ($) Credit ($) Cash at bank 8 985   Account receivables 31 200   Prepaid insurance 3 900   Office Supplies 4 680   Office equipment 14 100   Accumulated depreciation - equipment   2 850 Accounts payable   315 Salary payable     Unearned service revenue   1 230 Loan payable   10 500 Capital   33 300 Drawings 60 000   Service revenue   159 270 Salary expenses 66 000   Depreciation expenses - equipment     Miscellaneous expenses 18 600   TOTAL 207 465 207 465    The following additional information is available at the end of June for adjustments:   A physical count of office supplies on 30 June shows $660 of unused supplies on hand Depreciation of the office equipment is 10% each year (straight line method is used) Of the $1230 unearned service revenue, $300 is still unearned Of prepaid insurance, 60% expired this period Salaries owed but not yet paid $1920 Provided consultancy service of $2000 on credit. This was not recorded for the month.   Required: Prepare adjusting entries at the end of 30 June, 2019 Calculate the balance of the total revenue of the company after adjustment Explain why accrual accounting adjustments are require

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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As at 30 June 2019, the unadjusted trial balance of Green Ltd was noted as follows:

 

Green Ltd

TRIAL BALANCE

AS AT 30 JUNE 2019

 

Accounts

Debit ($)

Credit ($)

Cash at bank

8 985

 

Account receivables

31 200

 

Prepaid insurance

3 900

 

Office Supplies

4 680

 

Office equipment

14 100

 

Accumulated depreciation - equipment

 

2 850

Accounts payable

 

315

Salary payable

 

 

Unearned service revenue

 

1 230

Loan payable

 

10 500

Capital

 

33 300

Drawings

60 000

 

Service revenue

 

159 270

Salary expenses

66 000

 

Depreciation expenses - equipment

 

 

Miscellaneous expenses

18 600

 

TOTAL

207 465

207 465

 

 The following additional information is available at the end of June for adjustments:

 

  • A physical count of office supplies on 30 June shows $660 of unused supplies on hand
  • Depreciation of the office equipment is 10% each year (straight line method is used)
  • Of the $1230 unearned service revenue, $300 is still unearned
  • Of prepaid insurance, 60% expired this period
  • Salaries owed but not yet paid $1920
  • Provided consultancy service of $2000 on credit. This was not recorded for the month.

 

Required:

  1. Prepare adjusting entries at the end of 30 June, 2019
  2. Calculate the balance of the total revenue of the company after adjustment
  3. Explain why accrual accounting adjustments are require
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