Juma Wakili operates professional firm offering legal services. Some of his clients are required to pay in advance for the services, while others are billed after the services have been rendered. Advance payments are credited to an account entitled Unearned Legal Fees, which represents unearned revenue. The business adjusts its accounts and closes its accounts at the end of each quarter. At March 31, 2021, the end of the first quarter of the year, the unadjusted trial balance appeared as follows: Sh’000’ Sh’000’ Cash 17,150 Fees receivable 37,800 Unexpired insurance 1,600 Prepaid rent 5,400 Office supplies 1,620 Office equipment 17,100 Accumulated depreciation: office equipment 5,700 Accounts payable 3,900 Unearned fees 24,000 Juma Wakili Capital 45,300 Juma Wakili drawings 3,200 Legal fees earned 33,320 Depreciation expense 0 Rent expense 3,000 Office supplies expense 450 Insurance expense 800 Repairs expense 1,200 Travel expense 3,400 Salaries expense 19,500 112,220 112,220 Additional information: 1) The depreciation expense with respect to office equipment for the second quarter was estimated at Sh. 855,000 2) The unearned fees account includes fees of Sh. 8,400,000 earned during the month of March by performing services for clients who had paid in advance 3) Salaries earned by employees during the month of March but not yet recorded or paid amounted to Sh. 1,665,000 4) The prepaid rent amount represents three months’ rent paid in advance on March 1 5) Legal services rendered during the month of March but not yet collected or billed to clients amounted to Sh. 3,900,000 6) Office supplies on hand on March 31st amounted to Sh.700,000 Prepare (1) statement of income 2 statement of financial position 3 changes in equity
Juma Wakili operates professional firm offering legal services. Some of his clients are required
to pay in advance for the services, while others are billed after the services have been rendered.
Advance payments are credited to an account entitled Unearned Legal Fees, which represents
unearned revenue. The business adjusts its accounts and closes its accounts at the end of each
quarter. At March 31, 2021, the end of the first quarter of the year, the unadjusted
appeared as follows:
Sh’000’ Sh’000’
Cash 17,150
Fees receivable 37,800
Unexpired insurance 1,600
Prepaid rent 5,400
Office supplies 1,620
Office equipment 17,100
Accounts payable 3,900
Unearned fees 24,000
Juma Wakili Capital 45,300
Juma Wakili drawings 3,200
Legal fees earned 33,320
Depreciation expense 0
Rent expense 3,000
Office supplies expense 450
Insurance expense 800
Repairs expense 1,200
Travel expense 3,400
Salaries expense 19,500
112,220 112,220
Additional information:
1) The depreciation expense with respect to office equipment for the second quarter was
estimated at Sh. 855,000
2) The unearned fees account includes fees of Sh. 8,400,000 earned during the month of
March by performing services for clients who had paid in advance
3) Salaries earned by employees during the month of March but not yet recorded or paid
amounted to Sh. 1,665,000
4) The prepaid rent amount represents three months’ rent paid in advance on March 1
5) Legal services rendered during the month of March but not yet collected or billed to clients
amounted to Sh. 3,900,000
6) Office supplies on hand on March 31st amounted to Sh.700,000
Prepare (1) statement of income
2
3 changes in equity
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