Question - 1 The following account balance were taken from the general ledger of Aslam on June 30, 1994 before

Question

Question - 1 The following account balance were taken from the general ledger of Aslam on June 30, 1994 before adjusting the accounts Name of Accounts Debit Credit Cash 15,000 Account Receivable 19,000 Merchandise Inventory (1/1/94) 41,200 Purchases 112,000 Office Equipment 45,100 Purchase discount 31,000 Carriage in 11,800 Sales Discount 1,200 Sales Revenue 126,200 Commission Income 3,500 Utilities Expense 2,500 Advertising Expense 8,000 Postages and Telephone expense 11,600 Salaries Expense 13,000 Rent Expense 14,500 Prepaid Insurance 11,500 Account Payable 60,000 Aslam Drawings 11,200 Aslam Capital 1,27,000 348,600 348,600 V. Adjustments at the end of the year: 1. Merchandise Inventory Dec 31, 1994 Rs. 6,000 ii. Allowance for Depreciation on equipment 1,300 iii. Allowance for Bad Debts 1,900 iv. Unpaid Salaries amount 1,500 Prepaid Insurance was 1,300 vi. Unearned Commission 500 vii. Rent expense for the year 15,000 viii. Utility Expense for the year 1,300 Advertising Expense for

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The given unadjusted trial balance is wrong. I am redrafting the unadjusted trial balance below to solve the problem . Unadjusted Trial Balance Name of accounts Debit Credit Cash 15,000 Accounts receivable 19,000 Merchandise inventory (1/1/1994) 41,200 Purchases 112,000 Office Equipment 45,100 Purchase discount 31,000 Carriage in 11,800 Sales discount 1,200 Sales Revenue 126,200 Commission Income 3,500 Utilities Expense 2,500 Advertising Expense 8,000 Postage and telephone expense 11,600 Salaries Expense 13,000 Rent Expense 14,500 Prepaid Insurance 11,500 Accounts Payable 60,000 Aslam Drawing 11,200 Asian Capital 127,000 Suspense 30,100 Total 347,700 347,700 Adjusting Entries Serial number Accounts Title and explanation Debit Credit 1 Merchandise Inventory [ Dec 31,1994] 6,000 Trading 6,000 [Closing stock transferred to trading account ] 2 Depreciation Expense - equipment 1,300 Allowance for depreciation on equipment 1,300 [Adjustment entry made for depreciation expense] 3 Profit & Loss 1,900 Allowance for Bad debts 1,900 [Allowance for debts are being made ] 4 Salaries Expense 1,500 Outstanding Salaries 1,500 [Salaries due but not paid ] 5 Insurance Expense [11,500 - 1,300] 10,200 Prepaid Insurance 10,200 [Insurance prepaid ] 6 Commission Income 500 Unearned Commission 500 [Commission received in advance ] 7 Rent Expense [15,000 - 14,500] 500 Outstanding Rent 500 [Rent expense due but not paid ] 8 Prepaid Utilities [2,500 - 1,300 ] 1,200 Utilities Expense 1,200 [Utilities

Liabilities and owner's equity	Rs	Rs	Assets	Rs	Rs
Current liabilities:			Current assets:
Accounts Payable		60,000	Cash		15,000
Outstanding salaries		1,500	Accounts Receivable	19,000
Unearned commission		500	Allowance for Bad debts	(19,00)
Outstanding rent		500	Accounts receivable, net		17,100
Non current liabilities		-	Merchandise inventory (31/12/1994)		6,000
Owner's equity :			Prepaid insurance		1,300
Aslam Capital	127,000		Prepaid Utilities		1,200
Asalm drawing	(11,200)		Prepaid advertisement		2,400
	115,800		Non Current assets :
Net Loss	(61,400)		Office Equipment	45,100
		54,400	Allowance for depreciation on equipment	(1,300)
			Office equipment , net		43,800
			Suspense		30,100
Total		116,900	Total		116,900

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Name of accounts	Debit	Credit
Cash	15,000
Accounts receivable	19,000
Merchandise inventory (1/1/1994)	41,200
Purchases	112,000
Office Equipment	45,100
Purchase discount		31,000
Carriage in	11,800
Sales discount	1,200
Sales Revenue		126,200
Commission Income		3,500
Utilities Expense	2,500
Advertising Expense	8,000
Postage and telephone expense	11,600
Salaries Expense	13,000
Rent Expense	14,500
Prepaid Insurance	11,500
Accounts Payable		60,000
Aslam Drawing	11,200
Asian Capital		127,000
Suspense	30,100
Total	347,700	347,700

Serial number	Accounts Title and explanation	Debit	Credit
1	Merchandise Inventory [ Dec 31,1994]	6,000
	Trading		6,000
	[Closing stock transferred to trading account ]
2	Depreciation Expense - equipment	1,300
	Allowance for depreciation on equipment		1,300
	[Adjustment entry made for depreciation expense]
3	Profit & Loss	1,900
	Allowance for Bad debts		1,900
	[Allowance for debts are being made ]
4	Salaries Expense	1,500
	Outstanding Salaries		1,500
	[Salaries due but not paid ]
5	Insurance Expense [11,500 - 1,300]	10,200
	Prepaid Insurance		10,200
	[Insurance prepaid ]
6	Commission Income	500
	Unearned Commission		500
	[Commission received in advance ]
7	Rent Expense [15,000 - 14,500]	500
	Outstanding Rent		500
	[Rent expense due but not paid ]
8	Prepaid Utilities [2,500 - 1,300 ]	1,200
	Utilities Expense		1,200
	[Utilities expense prepaid ]
9	Prepaid Advertisement [8,000 - 5,600]	2,400
	Advertising Expense		2,400
	[Advertisement expense prepaid ]

Particulars	Rs	Rs	Particulars	Rs	Rs
Merchandise inventory [1/1/94]		41,200	Sales Revenue	126,200
Purchases	112,000		Less: Sales discount	1,200
Less: Purchase discount	31,000				125,000
		81,000	Merchandise inventory [Dec 31,1994]		6,000
Carriage in		11,800	Gross Loss		3,000

Total		134,000	Total		134,000
Gross Loss		3,000
Utilities Expense	2,500
Less: Prepaid utilities	1,200		Commission Income	3,500
		1,300	Less : Unearned commission	500
Advertising Expense	8,000				3,000
Less: Prepaid advertising	2,400		Net Loss		61,400
		5,600
Postage and telephone expense		11,600
Salaries expense	13,000
Add: Outstanding salaries	15,00
		14,500
Rent Expense	14,500
Add: Outstanding rent	500
		15,000
Insurance Expense		10,200
Depreciation expense - Equipment		1,300
Allowance for Bad debts		1,900

Total		64,400	Total		64,400