Exercise for Chapter 1: Adjusted trial balance

Submission date: 28 September 2016 through online learning system

OPARA Bhd. opened for business on 1 June 2015. Its accounts from the ledger journal on 31
August 2015 are as follows.
Account
Cash
Prepaid Insurance
Supplies
Land
Buildings
Equipment
Accounts Payable
Unearned Rent Revenue
Mortgage Payable
Share capital
Dividends
Rent revenue
Salaries and wages expense
Utilities expenses
Maintenance and repairs expense

Balance
RM19,600
4,500
2,600
20,000
120,000
16,000
4,500
4,600
50,000
100,000
5,000
86,200
44,800
9,200
3,600

Other data that not recorded yet is as follows:

1. The balance in prepaid insurance is a one-year premium paid on 1 June 2015.
2. An inventory count on 31 August shows RM 650 of supplies on hand.
3. Annual depreciation rates are 4% for buildings and 10% for equipment. Salvage value of both
is estimated to be 10% of cost each. Both assets were purchased on 1 June 2015.
4. Unearned Rent Revenue of RM3,800 was earned prior to 31 August.
5. Salaries of RM375 were unpaid at 31August.
6. Rentals of RM800 were due from tenants at 31August.
7. The mortgage interest rate is 8% per year. The mortgage dated 1 June 2015.
REQUIRED:
(a) Prepare the Unadjusted Trial Balance of OPARA Bhd on 31August 2015
(b) Journalize the adjusting entries on 31 August for the 3-month period 1 June 31August
2015. (Omit explanations.)
(c) Prepare an adjusted trial balance on 31August 2015.

OPARA BHD
UNADJUSTEDTRIAL BALANCE
31 AUGUST, 2015

Cash
Prepaid Insurance
Supplies
Land
Buildings
Equipment
Accounts Payable
Unearned Rent Revenue
Mortgage Payable
Common Stock
Dividends
Rent Revenue
Salaries and Wages Expense
Utilities Expenses
Maintenance and Repairs Expense

Debit
RM 19,600
4,500
2,600
20,000
120,000
16,000

Credit

RM4,500
4,600
50,000
100,000
5,000
86,200
44,800
9,200
3,600
RM245,300

RM245,300

(b) Adjusted Entries on 31 August 2015

1.

Aug. 31

Insurance Expense (RM4,500 X 3/12)

Insurance Expense Payable

2.

Aug. 31

1,125
1,125

Supplies Expense (RM2,600 RM650)...........................................................

1,950
Supplies.....................................................................................................
1,950

3.

Aug. 31

Depreciation Expense........................................................................................
1,080
Accumulated Depreciation

Buildings................................................................................................
1,080
(RM120,000 RM12,000 = RM108,000;
RM108,000 X 4% = RM4,320 per year;
RM4,320 X 3/12 = RM1,080)

Aug. 31

Depreciation Expense........................................................................................
360
Accumulated Depreciation
Equipment..............................................................................................
360
(RM16,000 RM1,600 = RM14,400;
RM14,400 X 10% = RM1,440;
RM1,440 X 3/12 = RM360)

4.

Aug. 31

Unearned Rent Revenue....................................................................................

3,800
Rent Revenue............................................................................................
3,800

5.

Aug. 31

Salaries and Wages Expense.............................................................................

375
Salaries and Wages Payable......................................................................
375

6.

Aug. 31

Accounts Receivable.........................................................................................
800

Rent Revenue............................................................................................
800

7.

Aug. 31

Interest Expense................................................................................................
1,000
Interest Payable

[(RM50,000 X 8%) X 3/12]..................................................................

1,000
(C)

OPARA BhD
Adjusted Trial Balance
August 31, 2015
Debit

Credit

Cash........................................................................................................... RM
19,600
Accounts Receivable.................................................................................

800

Prepaid Insurance (RM4,500 RM1,125)................................................

3,375

Supplies (RM2,600 RM1,950)...............................................................

650

Land..........................................................................................................

20,000

Buildings...................................................................................................

120,000

Accumulated DepreciationBuildings.....................................................
Equipment.................................................................................................

RM 1,080
16,000

Accumulated DepreciationEquipment...................................................

360

Accounts Payable......................................................................................

4,500

Unearned Rent Revenue (RM4,600 RM3,800)......................................

800

Salaries and Wages Payable......................................................................

375

Interest Payable.........................................................................................

1,000

Mortgage Payable.....................................................................................

50,000

Share CapitalOrdinary...........................................................................

100,000

Retained Earnings.....................................................................................

Dividends..................................................................................................

5,000

Rent Revenue (RM86,200 + RM3,800 + RM800)....................................

90,800

Salaries and Wages Expense (RM44,800 + RM375).................................

45,175

Utilities Expense.......................................................................................

9,200

Maintenance and Repairs Expense............................................................

3,600

Insurance Expense.....................................................................................

1,125

Supplies Expense......................................................................................

1,950

Depreciation Expense(Buildings)..........................................................

1,080

Depreciation Expense(Equipment)........................................................

360

Interest Expense........................................................................................

1,000
RM248,915

RM248,915