Problems
P4.1 Rawalpindi Technical School’s unadjusted trial balance on December 31, 1997, the end of its annual accounting period, is
as follows:
RAWALPINDI TECHNICAL SCHOOL
Trial Balance
December 31, 1997
Bank Rs. 72,000
Office supplies 43,000
Prepaid insurance 81,000
Professional library 198,000
Accumulated depreciation, professional library Rs. 84,900
Equipment 433,000
Accumulated depreciation, equipment 149,000
Creditors 8,600
Unearned fee revenue 24,000
Siddiqui’s capital 559,500
Siddiqui’s drawings 150,000
Enrolment fees earned 434,000
Salaries expense 168,000
Rent expense 96,000
Advertising expense 5,000
Utilities expense 14,000
Totals Rs. 1,260,000 Rs. 1,260,000
Required
i Set up accounts for the items in the trial balance, plus these additional accounts: Debtors; Accrued wages;
depreciation expense, equipment; depreciation expense, professional library; insurance expense; and office
supplies expense. Enter the trial balance amounts in the accounts.
ii Use the following information to prepare and post adjusting entries:
a An examination of insurance policies shows Rs. 9,000 of expired insurance.
b An inventory shows Rs. 16,700 of office supplies on hand.
c Estimated annual depreciation on the equipment is Rs. 33,000.
d Estimated annual depreciation on the professional library is Rs. 13,200.
e The school offers extended services to those in need of training beyond the campus. On November 1, the
company agreed to in-house training for a client. The contract calls for Rs. 6,000 monthly fee, and the client
paid the first four months’ fees in advance.
f On October 15, the school agreed to teach a three-month computer class for a local business for Rs. 10,800
per month payable at the end of the class. Extension fees for two and one half months have accrued.
g Mr Khalid is paid weekly; and on December 31, three days’ wages at Rs. 700 per day have accrued.
GENERAL JOURNAL
Date Description Debit Credit
Ledger Account
AMBASSADORS (PVT) LTD
Trial Balance
July 31, 1997
Cash in hand (110) Rs. 2,000
Bank (111) 100,000
Debtors (113) 55,000
Supplies (115) 6,100
Office equipment (141) 42,000
Creditors (211) Rs. 26,000
Kamran’s capital (311) 179,100
Rs. 205,100 Rs. 205,100
Kamran’s withdrawals (312); public relations fees (411); salaries expense (511); rent expense (512); utility expense (513);
telephone expense (514); and advertising expense (515) added in august bill
Ambassador Private Limited
Trial Balance
as at August 31, 1997
Dr. Cr.
CASH 29400
BANK 71500
DEBTORS 110800
CREDITORS 25800
SUPPLIES 9100
UTITLITY BILL (513) 4600
TELEPHONE BILL (514) 7000
REVENUE 123000
SALARIES (511) 38000
DRAWINGS (312) 12000
RENT (512) 6500
OFFICE EQPT 42000
Advertising expense (515) ? ?
KAMRAN CAPITAL 179100
Rs 330900 Rs 327900
