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Question 2: Afif Enterprise has operated since 1 January 2017. The following are the accounts’ balance of Afif Enterprise as at 31 December 2020:Account Balance (RM)Cash 18,Accounts receivable 15,Prepaid insurance 2,Inventory at 31/12/2020 22,Office supplies 4,Prepaid advertising 3,Furniture &am...

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Question 2: Afif Enterprise has operated since 1 January 2017. The following are the accounts’ balance of Afif Enterprise as at 31 December 2020: Account

Balance (RM)

Cash

18,500

Accounts receivable

15,200

Prepaid insurance

2,400

Inventory at 31/12/2020

22,800

Office supplies

4,500

Prepaid advertising

3,400

Furniture & fittings

22,600

Accumulated Depreciation – furniture & fittings

10,400

Unearned Sales revenue

3,700

Accounts payable

17,500

Long term loan

12,000

Capital - Afif

24,000

Sales revenue

42,000

Salaries expenses

5,800

Rental expenses

13,200

Utilities expenses

1,200

Additional information: 1. Furniture and fittings are depreciated at a rate of 10 per cent annually using the straight-line method. 2. The balance of office supplies on hand at the end of the year is RM2,500. 3. Rentals for the current year amounting to RM2,200 are not yet paid. 4. RM3,700 of the sales recorded are sales for January 2021. The customer has paid in advance; however, the goods will be delivered in January 2021. 5. Employees’ salary for December 2020 of RM3,300 is not yet paid. 6. Utility bill for December 2020 of RM350 has been received but is not yet paid. 7. The prepaid advertising includes RM300 for January 2021 advertisement.

8. Expired insurance for the year 2020 is RM1,200. 9. The accrued interest on the long-term loan until 31 December 2020 is RM900. Based on the above information, you are required to: a. Prepare an adjusted Trial Balance as at 31 December 2020 (12.5) b. Prepare an Income Statement for the year ended 31 December 2020 (6) c. Prepare a Balance Sheet as at 31 December 2020 (8.5)

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Trial balance of Afif enterprise

Particulars

Debit (RM)

Cash

18,500

Accounts receivable

15,200

Prepaid insurance

2,400

Inventory

22,800

Office supplies

4,500

Prepaid advertising

3,400

Furniture and fitting

22,600

Credit(RM)

Accumulated depreciation

10,400

Unearned sales revenue

3,700

Accounts payable

17,500

Long term loan

12,000

Capital -Afif

24,000

Sales revenue

42,000

Salaries expenses

5,800

Rental expenses

13,200

Utilities expenses

1,200

Total

109,600

109,600

Income statement of Afif enterprises for the year ended 31st December, 2020

Particulars

Amount(RM)

Revenue(42,000-3,700)

38,300

Expenses : Salaries expenses

5,800

Utilities expenses

1,200

Rental expenses

13,200

Expired insurance

1,200

Accrued interest

900

Write off of office supplies(4,500-2,500)

2,000

Depreciation

2,260

Net Income

11,740

Balance sheet as at 31st Dec 2020

Particulars

Amount

Assets Fixed asset(22,600-12,660)

10,000

Accounts receivable

15,200

Inventory(22,800+2,500)

25,300

Prepaid expenses(2,400+3,400)

5,800

Cash

18,500

Liabilities Capital

24,000

Retained earnings

11,740 17,500

Accounts payable Long term loan(12,000+900)

12,900

Unearned sales revenue

3,700

Rent payable

2,200

Advance received

3,700

Salary payable

3,300

Utilities payable

350

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