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Assignment 2:

Answer all the questions and show your detailed workings clearly and systematically.
Absolute Berhad prepared the following unadjusted trial balance on 31 December 2018
for its first year of operation:
Accounts Debit (RM) Credit (RM)
Cash 31,050
Accounts receivable 202,500
Supplies 48,600
Motor vehicles 1,023,300
Account payable 47,250
Unearned revenue 54,000
Capital 702,000
Drawings 40,500
Revenue 1,221,750
Salary expense 283,500
Petrol expense 24,300
Rent expense 72,000
Insurance expense 144,000
Utilities expense 155,250
Total 2,025,000 2,025,000

An analysis of the accounts shows the following:

(i) Supplies in hand on 31 December were RM10,800.
(ii) Depreciation on motor vehicles was estimated to be RM36,900.
(iii) Unbilled revenue on 31 December was RM15,975.
(iv) The amount of unearned revenue in the above balance represents all the advanced
payments received from customers during the year for booking services. Sixty
percent of the services have been provided by the end of the year.
(v) Unpaid bills on utilities on 31 December amounted to RM5,400.

a) Prepare the adjusting entries for the above transactions at 31 December 2018.
b) Prepare the adjusted trial balance as at 31 December 2018 for Absolute Berhad as at
31 December 2018.
c) From the adjusted trial balance in b), prepare the income statement for the year
ended 31 December 2018 and balance sheet as at 31 December 2018.
[Total: 40 marks]