Question

Problem 3: Zubair Oil and Gas Company has the following unadjusted trial balance at 31 December 2015. Zubair Oil and Gas Company Unadjusted Trial Balance 31" December 2018 Accounts Debit (OMR) Credit (OMR) Utilities Expenses Supplies 2.400 Capital 300,000 Cash 386,800 Miscellaneous Expenses 2.400 Prepaid Insurance 7,600 Uneamed Revenue 10440 Salaries Expenses 199,000 Account Receivable 28.000 Office Furniture 20.000 Accumulated Depreciation on Onice Furniture 5.000 Bank Overdraft 5.800 Account Payable 4.000 Building 68.000 Notes Payable 16,760 Retained Earnings 170.000 Dividends 28.000 Service Revenue 274,000 Repair Expenses 14.200 Drawings Total 786.000 786,000 Additional Information about the business 1. Insurance expense for the year OMR 3,000 2. Salaries accrued but not yet on December 31, OMR 35,000 3. Uneamed Revenue at December 31, is OMR 5,000 4. Supplies on hand at 31 December, OMR 1,000 5. Service revenues earned but not yet recorded at 31 December, OMR 2,000 6. Depreciation on office Furniture for the year OMR 2000 A. Prepare the necessary Adjusting Entries on 31 December 2018 B. Prepare the Adjusted Trial Balance. C. Prepare Income Statement, Statement of Owners' Equity and Balance Sheet.

Answer 1

Credit (OMR) A. Adjusting Journal Entries as on 31 Dec 2013 Partiulars Dr Insurance Expense A/C Cr Prepaid Insurance A/C (To Record current year Insurance Expense) Debit (OMR) 3000 3000 3000 Dr Profit & Loss A/C Cr Insurance Expense A/C (To Record trasnfer of Insurance Expense to P&L statement) 5000 35000 Dr Salaries Expenses A/C Cr Salaries Payable |(To Record Salaries Expense accrued for the year) 35000 35000 Dr Profit & Loss A/C Cr Salaries Expense A/C (To Record trasnfer of Insurance Expense to P&L statement) 35000 54401 Dr Unearned Revenue A/C Cr Service Revnue A/C (To Record recognition of revenue) 35000

5440 Dr Service Revenue Cr Profit & Loss A/C (To Record trasnfer of Revenue to P&L statement) 5440 1400 Dr Supplies Expense A/C Cr Supplies A/C (To Record Supplies consumed) 1400 1400 Dr Profit & Loss A/C Cr Supplies Expense A/C (To Record trasnfer of Supplies Expense to P&L statement) 1400 2000 Dr Accounts Receivable A/C Cr Service Revenue A/C (To Record Service Revenue earned during the year) 1400 2000 Dr Service Revenue Cr Profit & Loss A/C (To Record trasnfer of Revenue to P&L statement) 2000 2000 Dr Depreciation A/C Cr Accumulated Depreciation on office furniture A/C (To Record Service Revenue earned during the year) 2000

2000 Dr Profit & Loss A/C Cr Depreciation A/C (To Record trasnfer of Depreciation Expense to P&L statement) 2000

B Credit(OMR) 300,000 Zubair Oil and Gas Company Adjusted Trial Balance 31st December 2018 Accounts Debit(OMR) Utilities Expenses 1,600 Supplies 1,000 Supplies Expenses 1,400 Capital Cash 386,800 Miscellaneous Expenses 2,400 Prepaid Insurance 4,600 Insurance Expense Uneaned Revenue Salaries Expenses 234,000 Salaries Pavable Accounts Receivable 30,000 Office Furniture 20,000 Accumulated Depreciation - office furniture Depreciation 2,000 Bank Overdraft Accounts Payable Building 68,000 Notes Payable 3,000 5,000 35,000 7,000 5,800 4,000 16,760

170,000 28,000 281,440 Retained Earnings Dividends Service Revenue Repairs Expenses Drawings Total 14,200 28,000 825,000 825,000

C

Zubair Oil and Gas Company Income Statement for the year ending 31st Dec 2018 Particulars Amount (OMR) Revenue Net Service Sales 281,440 Total Revenue 281,440 1,600 1,400 2,400 Expenses Utilities Expenses Supplies Expenses Miscellaneous Expenses Insurance Expense Salaries Expenses Depreciation Dividends Repairs Expenses 3,000 234,000 2,000 28,000 14,200 286,600 Net Loss (5,160)

Amount Assets Current Assets Cash Prepaid Insurance Accounts Receivable Zubair Oil and Gas Company Balance Sheet as on 31st Dec 2018 Amount Liabilities Current Liabilities 386,800 Unearned Revenue 4,600 Salaries Payable 30,000 421,400 Notes Payable Bank Overdraft Accounts Payable 20,000 (7.000)| 13,000 Equity Capital 68,000 Retained Earnings Current Year Loss Drawings 1.000 503,400 Total 5,000 35,000 16,760 5,800 4,000 66,560 Non Current Assets Office Furniture . Less: accumulated depreciation Building 300,000 170,000 (5.160) (28,000) 436,840 Other Assets Supplies Total 503,400 Zubair Oil and Gas Company Statement of Owner's Equity as on 31 Dec 2018 Particulars Amount (OMR) Capital 300,000 Retained Earnings 170,000 Current Year Loss (5.160) Drawings (28,000) 436,840

The adjustment entries have been incorporated in the trial balance and the balance sheet & Income statement are prepared thereon