(b) The following is the unadjusted trial balance extracted from the books of Mali Estate Agents as at 31st December 2020. The entity is involved in the provision of property management services and prepares its annual financial statements per the calendar year.       Account Name   Dr   Cr   Cash   725,000       Capital       600,000   Land   400,000       Office equipment   360,000       Accumulated depreciation: Office equipment           Office supplies   225,000       Prepaid rent   180,000       Notes payable       960,000   Accounts payable       21,600   Drawings           Service revenue       561,800   Accounts receivable   49,400       Advertising expense   13,000       Interest expense on note payable           Depreciation expense: Office equipment           Office supplies expense           Rent expense   150,000       Salary expense   41,000           2,143,400   2,143,400       Additional information:   (i) Depreciation expense on office equipment purchased on 1st July 2020 had not yet been booked. Annual depreciation expense amounts to Ksh 36,000   (ii) Office supplies as at 31st December amounted to Ksh 120,000   (iii) Interest expense on the note payable amounting to Ksh 48,000 had been omitted   (iv) The prepaid rent amount of Ksh 180,000 was paid on 1st of December 2021 for the period December 2020 to February 2021.   (v) Of the accounts receivable, Ksh 25,000 was settled on the very last day of the year but had been missed out by Mali’s accountant.   (vi) On 25th December 2020, Bwana Mali withdrew Ksh 150,000 from the business to pay for his family’s holiday trip to Mombasa. This transaction had not been recorded       Required:   (i) Prepare the adjusting entries required at 31st December, 2020 and extract the adjusted trial balance

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(b) The following is the unadjusted trial balance extracted from the books of Mali Estate Agents as at 31st December 2020. The entity is involved in the provision of property management services and prepares its annual financial statements per the calendar year.

 

 

 

Account Name

 

Dr

 

Cr

 

Cash

 

725,000

 

 

 

Capital

 

 

 

600,000

 

Land

 

400,000

 

 

 

Office equipment

 

360,000

 

 

 

Accumulated depreciation: Office equipment

 

 

 

 

 

Office supplies

 

225,000

 

 

 

Prepaid rent

 

180,000

 

 

 

Notes payable

 

 

 

960,000

 

Accounts payable

 

 

 

21,600

 

Drawings

 

 

 

 

 

Service revenue

 

 

 

561,800

 

Accounts receivable

 

49,400

 

 

 

Advertising expense

 

13,000

 

 

 

Interest expense on note payable

 

 

 

 

 

Depreciation expense: Office equipment

 

 

 

 

 

Office supplies expense

 

 

 

 

 

Rent expense

 

150,000

 

 

 

Salary expense

 

41,000

 

 

 

 

 

2,143,400

 

2,143,400

 

 

 

Additional information:

 

(i) Depreciation expense on office equipment purchased on 1st July 2020 had not yet been booked. Annual depreciation expense amounts to Ksh 36,000

 

(ii) Office supplies as at 31st December amounted to Ksh 120,000

 

(iii) Interest expense on the note payable amounting to Ksh 48,000 had been omitted

 

(iv) The prepaid rent amount of Ksh 180,000 was paid on 1st of December 2021 for the period December 2020 to February 2021.

 

(v) Of the accounts receivable, Ksh 25,000 was settled on the very last day of the year but had been missed out by Mali’s accountant.

 

(vi) On 25th December 2020, Bwana Mali withdrew Ksh 150,000 from the business to pay for his family’s holiday trip to Mombasa. This transaction had not been recorded

 

 

 

Required:

 

(i) Prepare the adjusting entries required at 31st December, 2020 and extract the adjusted trial balance

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