7/30/2019 LEC#07_Math

1/8

C#503

PROBLEMSASPERLECTURES

LEC#07

PROBLEM about Adjusting Entries

Question:

ABC Ltd. is a provider of taxation services. The following unadjusted trial balance

has been taken from the books of accounts the company.

ABC Ltd.

Trial Balance

January 31, 2010

Account Title Debit

(Tk.)

Credit

(Tk.)

Cash 5,400

Accounts Receivable 2,800

Pre-paid Insurance 2,400Supplies 1,300

Equipment 60,000

Notes payable (12%) 30,000

Accounts Payable 2,400

Capital 30,000

Drawings 1,000

Consulting Fees 14,900

Salary Expense 3,200

Utilities Expense 800

Advertising Expense 400

Total 77,300 77,300

Adjustments:

a) Insurance expires at the rate of Tk.150 per month

b) Supplies on hand at the end of the month Tk.300

c) Monthly depreciation on equipment is Tk.1,000

d) Salaries accrued Tk.1,000

e) Consultancy service provided it has not been recorded Tk.1,000

Requirements:1. Journalize the adjusting entries for the month in the books of ABC Ltd.

2. Post the adjusting entries into ledger accounts.

3. Prepare adjusted trial balance as at January 31, 2010.

MOstofa, MBM 16th Batch, BIBM

7/30/2019 LEC#07_Math

2/8

C#503

PROBLEMSASPERLECTURES

Solution-1:

ABC Ltd.

Adjusting Journal

Date/

SRL No.

Explanation Ref. Debit

(Tk.)

Credit

(Tk.)a) Insurance Expense A/C Dr. 150

Pre-paid Insurance A/C Cr. 150[Pre-paid Insurance as worth Tk.150 has beenexpired during the month]

b) Supplies Expense A/C Dr. 1,000

Supplies A/C Cr. 1,000

[Supplies expensed Tk.1000]

c) Depreciation A/C Dr. 1,000

Equipment A/C Cr. 1,000[Depreciation on equipment for the month wasTk.1000]

d) Salaries Expense A/C Dr. 1,000Salaries Payable A/C Cr. 1,000

[Salaries accrued Tk.1000]

e) Cash A/C Dr. 1,000

Consulting Fees A/C Cr. 1,000

[Consulting fees was not recorded]

f) Interest Expense A/C Dr. 300

Interest Payable A/C Cr. 300

[Interest rate on notes payable is 12%]

Total 4,450 4,450

Solution-2:

ABC Ltd.

Adjusting Ledger

MOstofa, MBM 16th Batch, BIBM

Pre-paid Insurance A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 2400

InsuranceExp. 150

Adj. Balance 2250

2400 2400

Equipment A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Depreciation A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/C

A/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Supplies Expense A/C

A/C No.:

Dr. Cr.

Supplies A/C 1000

Adj. Balance 1000

1000 1000

Supplies A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 1300 Supplies Exp. 1000

Adj. Balance 300

1300 1300

7/30/2019 LEC#07_Math

3/8

C#503

PROBLEMSASPERLECTURES

MOstofa, MBM 16th Batch, BIBM

Salary Expense A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 3200

Salary Payable 1000

Adj. Balance 4200

4200 4200

Salary Payable A/C

A/C No.:

Dr. Cr.

Salary Exp. 1000

Adj. Balance1000

1000 1000

Depreciation A/C

A/C No.:

Dr. Cr.

Equipment 1000

Adj. Balance 1000

1000 1000

Equipment A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010

60000 Depreciation 1000

Adj. Balance5900

0

60000

60000

Cash A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 5400

Consulting Fee 1000

Adj. Balance 6400

6400 6400

Consulting Fees A/C

A/C No.:

Dr. Cr.

Balance onJan 31,2010

14900

Cash 1000

Adj. Balance1590

0

159001590

0

Interest A/C

A/C No.:

Dr. Cr.

Interest Payable 300

Adj. Balance 300

300 300

Interest Payable A/C

A/C No.:

Dr. Cr.

InterestExpense 300

Adj. Balance 300

300 300

7/30/2019 LEC#07_Math

4/8

C#503

PROBLEMSASPERLECTURES

Solution-3:

ABC Ltd.

Adjusted Trial BalanceJanuary 31, 2010

Account Title Debit

(Tk.)

Credit

(Tk.)

Cash 6,400

Accounts Receivable 2,800

Pre-paid Insurance 2,250

Supplies 300

Equipment 59,000

Notes payable (12%) 30,000

Accounts Payable 2,400Salary Payable 1,000

Interest Payable 300

Capital 30,000

Drawings 1,000

Consulting Fees 15,900

Salary Expense 4,200

Utilities Expense 800

Advertising Expense 400

Supplies Expense 1,000

Insurance Expense 150

Interest Expense 300

Depreciation 1,000

Total 79,600 79,600

MOstofa, MBM 16th Batch, BIBM

7/30/2019 LEC#07_Math

5/8

C#503

PROBLEMSASPERLECTURES

Question (modified):

XYZ Ltd. is a provider of taxation services. The following unadjusted trial balance

has been taken from the books of accounts the company.

XYZ Ltd.Trial Balance

January 31, 2010

Account Title Debit

(Tk.)

Credit

(Tk.)

Cash 5,400

Accounts Receivable 2,800

Pre-paid Insurance 2,400

FDR (10%) 12,000

Supplies 1,300

Equipment 60,000Notes payable (12%) 30,000

Accounts Payable 2,400

Capital 40,000

Drawings 1,000

Consulting Fees 16,900

Salary Expense 3,200

Utilities Expense 800

Advertising Expense 400

Total 89,300 89,300

Adjustments:

f) Insurance expires at the rate of Tk.150 per month

g) Supplies on hand at the end of the month Tk.300

h) Monthly depreciation on equipment is Tk.1,000

i) Salaries accrued Tk.1,000

j) Consultancy service provided it has not been recorded Tk.1,000

Requirements:

4. Journalize the adjusting entries for the month in the books of XYZ Ltd.

5. Post the adjusting entries into ledger accounts.6. Prepare adjusted trial balance as at January 31, 2010

MOstofa, MBM 16th Batch, BIBM

7/30/2019 LEC#07_Math

6/8

C#503

PROBLEMSASPERLECTURES

Solution-1:

XYZ Ltd.

Adjusting JournalDate/

SRL No.Explanation Ref. Debit

(Tk.)Credit(Tk.)

a) Insurance Expense A/C Dr. 150Pre-paid Insurance A/C Cr. 150[Pre-paid Insurance as worth Tk.150 has beenexpired during the month]

b) Supplies Expense A/C Dr. 1,000

Supplies A/C Cr. 1,000

[Supplies expensed Tk.1000]

c) Depreciation A/C Dr. 1,000

Equipment A/C Cr. 1,000[Depreciation on equipment for the month wasTk.1000

d) Salaries Expense A/C Dr. 1,000

Salaries Payable A/C Cr.1,000[Salaries accrued Tk.1000]

e) Cash A/C Dr. 1,000

Consulting Fees A/C Cr. 1,000

[Consulting fees was not recorded]

f) Interest Expense A/C Dr. 300

Interest Payable A/C Cr. 300

[Interest rate on notes payable is 12%]

g) Interest Receivable A/C Dr. 100

Interest Revenue Cr. 100

[Interest rate on FDR is 10%]

Total 4,550 4,550

Solution-2:

XYZ Ltd.

Adjusting Ledger

MOstofa, MBM 16th Batch, BIBM

Pre-paid Insurance A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 2400

InsuranceExp. 150

Adj. Balance 2250

2400 2400

Equipment A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Depreciation A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/CA/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Insurance Expense A/C

A/C No.:

Dr. Cr.

Pre-paid Insurance 150

Adj. Balance 150

150 150

Supplies Expense A/C

A/C No.:

Dr. Cr.

Supplies A/C 1000

Adj. Balance 1000

1000 1000

Supplies A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 1300 Supplies Exp. 1000

Adj. Balance 300

1300 1300

Salary Expense A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 3200

Salary Payable 1000

Adj. Balance 4200

4200 4200

Salary Payable A/C

A/C No.:

Dr. Cr.

Salary Exp. 1000

Adj. Balance1000

1000 1000

7/30/2019 LEC#07_Math

7/8

C#503

PROBLEMSASPERLECTURES

Solution-3:

MOstofa, MBM 16th Batch, BIBM

Depreciation A/C

A/C No.:

Dr. Cr.

Equipment 1000

Adj. Balance 1000

1000 1000

Equipment A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010

60000 Depreciation 1000

Adj. Balance5900

0

60000

60000

Cash A/C

A/C No.:

Dr. Cr.

Balance on Jan31,2010 5400

Consulting Fee 1000

Adj. Balance 6400

6400 6400

Consulting Fees A/C

A/C No.:

Dr. Cr.

Balance onJan 31,2010

16900

Cash 1000

Adj. Balance1790

0

179001790

0

Interest A/C

A/C No.:

Dr. Cr.

Interest Payable 300

Adj. Balance 300

300 300

Interest Payable A/C

A/C No.:

Dr. Cr.

InterestExpense 300

Adj. Balance 300

300 300

Interest Receivable A/C

A/C No.:

Dr. Cr.

Interest Revenue 100

Adj. Balance 100

100 100

Interest Revenue A/C

A/C No.:

Dr. Cr.

InterestReceivable 100

Adj. Balance 100

100 100

7/30/2019 LEC#07_Math

8/8

C#503

PROBLEMSASPERLECTURES

XYZ Ltd.

Adjusted Trial Balance

January 31, 2010

Account Title Debit

(Tk.)

Credit

(Tk.)

Cash 6,400

Accounts Receivable 2,800

Interest Receivable 100

Pre-paid Insurance 2,250

Supplies 300

FDR (10%) 12,000

Equipment 59,000

Notes payable (12%) 30,000Accounts Payable 2,400

Salary Payable 1,000

Interest Payable 300

Capital 40,000

Drawings 1,000

Consulting Fees 17,900

Interest Revenue 100

Salary Expense 4,200

Utilities Expense 800

Advertising Expense 400

Supplies Expense 1,000

Insurance Expense 150

Interest Expense 300

Depreciation 1,000

Total 91,700 91,700

MOstofa, MBM 16th Batch, BIBM