80.2K

Verified Solution

Link Copied!

Mr. Firdaus is the owner of Pelangi Color Services which is involved in providing painting services for residential houses and commercial buildings. The following is the trial balance on 30 September 2019 prepared by Mr. Firdaus himself. Kt. RAINBOW COLOR SERVICES Trial Balance As at 30 September 2019 Dt. Cash 28,200 Painting supplies 51,200 Furniture and equipment 40,000 Vehicles 35,000 Accumulated depreciation - vehicles Accumulated depreciation-furniture and equipment Loans (12.5% maturity 2015) Service results have not been obtained Capital Take 35,000 Service Results Accounting firm fee expenses 5,200 Vehicle insurance expenses 2,300 Interest expense on loans 2,500 General office expenses 5,800 Spend workers' wages 23,000 Phone shopping 7,900 Transportation expenses 14,800 Amount 250,900 3,500 6,000 20,000 10,000 47,400 164,000 250,900 RAINBOW COLOR SERVICES Income Statement For The Year Ended 30 September 2019 Service results 164,000 Decline: Accounting firm fees 5,200 Vehicle insurance expenses 2,300 Interest expense on loans 2,500 General office expenses 5,800 Spend workers' wages 23,000 Phone shopping 7,900 Transportation expenses 14,800 61,500 Net Profit 102,500 After examining the income statement prepared by himself, Mr. Firdaus doubted the validity of the statement. You are requested by Mr. Firdaus to review the above statement and prepare back the correct statement in accordance with generally accepted accounting principles. After reviewing you find that the following have not been taken into account 1. An invoice was issued to the customer on 3 October 2019 for painting work completed in September amounting to RM9,000. 2. Insurance for employee protection for the next year amounting to RM6,000 has already been paid but has not been recorded. 3. Employees' wages for overtime work in September have been calculated at RM1,500. These wages will be paid at the end of the first week of October 2019. 4. Depreciation on vehides is at the rate of 10% per annum on cost. 5. Fumiture and equipment are expected to be usable for 10 years and have a residual value of RM10,000 6. Mr. Firdaus has received a payment of RM10,000 for ordering painting work. However as of 30 September 2019 only of the entire work has been implemented Be required: a) Prepare adjustment journal entries. b) Prepare the Adjusted Trial Balance on 30 September 2019. c) Prepare Income Statement for the year ended 30 September 2019, 4) Prepare the Statement of Financial Position as at 30 September 2019

Answer & Explanation Solved by verified expert

See Answer