Question

QUESTION 1 - Accrual Accounting Murray's Seafood Shop sells seafood and is owned and operated by Callum Murray. The following trial balance has been prepared at year's end. MURRAY'S SEAFOOD SHOP HARDWARE - TRIAL BALANCE AS AT 30 JUNE 2019 Debit (8) Credit (5) Cash 10 400 Accounts Receivable 45 600 Inventory (1 July 2018) 43 000 Prepaid Rent 5 400 Supplies 310 Furniture 32 500 Accumulated Depreciation - Furniture 5880 Equipment 53 000 Accumulated Depreciation - Equipment 4 500 Accounts Payable 32 250 Capital (1 July 2018) 122 870 Drawings 12 500 Sales 212 650 Sales Returns & Allowances 2 250 Discount Allowed Purchases 130 200 Discount Received Supplies Expense 190 Freight In Expense 2 150 Freight Out Expense 1 200 Wages Expense 24 000 Local Government Rates Expense 800 Insurance Expense 4800 Advertising Expense 3 750 Rent Expense 6 600 $379 050 $379 050 400 900 (continued.....)

Answer 1

	Adjusting Entries
No.	Account Title	Debit	Credit
1	Prepaid Insurance	1750
	Insurance expense		1750
	(350*5)
2	Supplies expense	270
	Supplies		270
3	Depreciation expense-equipment	8500
	Acc.Depreciation -equipment		8500
	(53000-2000)/6
	Depreciation expense-Furniture	3120
	Acc.Depreciation -Furniture		3120
	(32500-1300)/10
4	Cash	500
	Unearned sales revenue		500
	Unearned sales revenue	100
	Sales revenue		100
5	Inventory	43680
	Discounts received	900
	Cost of goods sold(Bal.fig.)	130770
	Purchases		130200
	Freight in expense		2150
	Inventory		43000
	(this JE is optional. Can do this in 1st part of Income statement also )
6	Prepaid advertising	1200
	Advertising expense		1200
7	No JE
8	Electricity expense	210
	Cash		210
	Telephone expense	240
	Accounts payable		240
9	Bad debt expense	1140
	Allowance for doubtful accounts		1140
	((45600+720)*2.5%)
10	Rent expense	5400
	Prepaid rent		5400
	Prepaid rent	4950
	Rent expense		4950
	(6600/12*9)
11	Cash	100
	Accounts receivable	720
	Sales revenue		820
12	Wage expense	380
	Wages payable		380