Question

An inexperienced bookkeeper prepared the following trial balance from the books of

Wilson Agencies, at 31 March 2006:

TRIAL BALANCE

Furniture and equipment 40 000

Accumulated depreciation: furniture and equipment 10 000

Bank: favourable balance 8 000

Debtors 15 000

Capital: A. Wilson 60 000

Drawings: A. Wilson 28 000

Creditors 5 000

Long-term loan 20 000

Commission earned 45 000

Insurance expense 6 000

Salaries 15 500

Rental 24 000

Telephone 3 500

R143 000 R143 000

Additional information:

i. Commission earned but not invoiced, R9 300.

ii. Prepaid insurance on 31 March 2006, R1 500.

iii. Depreciation on furniture and equipment not yet provided for, R3 000.

iv. Accrued interest on long-term loan, R4 000.

v. Salaries in arrears, R2 000.

vi. Telephone due, R500.

Required

(a) Journalise the necessary adjustments. Narrations are not required.

(b) Prepare a corrected, post-adjustment trial balance as at 31 March 2006.

(c) Prepare the closing journal entries.

Answer 1

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PAGE NO.: DATE: Interest accrued on loan. Suspense 4000 22500 161800 161800 P& i Aic Du Insurance usoo usoo Commission All Dre S4B00 To per. 54300 ü Aco Deo Peu Arc Do To Accrued Interest on loan 4000 4000