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Assignment Work On Accounting Errors

The accounting records for Amu Services Ltd contain several errors that need to be corrected through journal entries. These include unrecorded revenue, adjusting supplies and insurance expenses, correcting prepaid rent, depreciating recording equipment, recording a loan and interest payable, adjusting unearned revenue, and accruing unpaid salaries and income taxes. An adjusted trial balance must be prepared after making the necessary journal entries to correct the accounting errors.

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69 views

Assignment Work On Accounting Errors

The accounting records for Amu Services Ltd contain several errors that need to be corrected through journal entries. These include unrecorded revenue, adjusting supplies and insurance expenses, correcting prepaid rent, depreciating recording equipment, recording a loan and interest payable, adjusting unearned revenue, and accruing unpaid salaries and income taxes. An adjusted trial balance must be prepared after making the necessary journal entries to correct the accounting errors.

Uploaded by

moraaloureen006
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment: Accounting errors

Amu Services Ltd


Trail Balance as at 31 December 2009
shs
Cash 179,400
Accounts receivable 325,600
Studio supplies 30,400
Un-expired insurance 2,000
Prepaid studio rent 16,000
Recording equipment 360,000
Accumulated depreciation: recording equipment 210,000
Loan 64,000
Interest payable 3,360
Income taxes payable 12,800
Unearned studio revenue 38,400
Capital stock 320,000
Retained earnings 152,000
Studio revenue earned 428,000
Salaries expense 72000
Supplies expense 48000
Insurance expense 4000
Depreciation expense: recording equipment 66000
Studio rent expense 84000
Interest expense 3360
Lighting expense 4700
Income tax expense 71600

Total ? ?
Given that accounts are adjusted monthly, the following information is provided.
Notes
1. Records show that 17,200/= in studio revenue had not been billed or recorded as of
Dec 31
2. Studio supplies on hand at Dec 31 amount to 12,800/=
3. On July August 1 2009, the studio purchased 6 months insurance policy for 6 months
for 3000/=
4. Studio is located in a rented building. On Nov 1, 2009 the studio paid 24,000/- rent in
advance for months of Nov, December and January hence. The entire amount was
debited to prepaid studio rent.
5. The useful life of the studio’s recording equipment is 60 months; entry to November
2009 made.
6. On May 1, 2009 the studio borrowed 32,000/= by signing a 12 month 9% loan to
Barclays Bank Ltd. the entire amount of 16,000 plus interest is due in full on April
30,2003. No entry had been made relating to the interest.
7. Records show that 72,00/= of cash receipts initially recorded as unearned studio
revenue has been earned as of Dec 31, 2009
8. Salaries to staff remain unpaid at Dec 31 was 4.050/=
9. Income tax expense for the year to Dec 31, 2009 is 74,400/=; 71,600/= of this had
been recorded
Required : Journal entries and adjusted Trial balance on an accounting worksheet.
20marks

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