FA – L1 – Q38 – Accruals and prepayments

Record adjustments for stationery, rent, rates, insurance, and lighting in ledger accounts for Nyame at 31 Dec 20X9.

Question

The following is an extract from the trial balance of Nyame at 31 December 20X9.

| | Dr | Cr | |

| GH¢(000) | GH¢(000) |

| Stationery | 560 |

| | Rent | 900 | |

| Rates | 380 | |

| Lighting and heating | 590 | |

| Insurance | 260 | |

| Wages and salaries | 2,970 | |

There was stationery still in hand at 31 December 20X9 which had cost GH¢15,000.
Rent of GH¢300,000 for the last three months of 20X9 had not been paid and no entry has been made in the books at all for it.
Of the rates, GH¢280,000 was for the year ended 31 March 20Y0. The remaining GH¢100,000 was for the three months ended 31 March 20X9.
Fuel had been delivered on 18 December 20X9 at a cost of GH¢15,000 and had been consumed before the end of 20X9. No invoice had been received for the GH¢15,000 fuel in 20X9 and no entry has been made in the records of the business.
GH¢70,000 of the insurance paid was in respect of insurance cover for the year 20Y0.
Nothing was owing to employees for wages and salaries at the close of 20X9.
Required:
Record the above information in the relevant accounts for the year ended 31 December 20X9 and close the accounts.

Answer

Stationery a/c

	GH¢(000)		GH¢(000)
31 Dec Balance per TB	560	31 Dec Inventory	15
		31 Dec S of P or L	545
	560		560

Rent a/c

	GH¢(000)		GH¢(000)
31 Dec Balance per TB	900	31 Dec S of P or L	1,200
31 Dec Accrual	300
	1,200		1,200

Rates a/c

	GH¢(000)		GH¢(000)
31 Dec Balance per TB	380	31 Dec Prepayment	280
		31 Dec S of P or L	100
	380		380

Lighting and heating a/c

	GH¢(000)		GH¢(000)
31 Dec Balance per TB	590	31 Dec S of P or L	605
31 Dec Accrual	15
	605		605

Insurance a/c

	GH¢(000)		GH¢(000)
31 Dec Balance per TB	260	31 Dec Prepayment	70
		31 Dec S of P or L	190
	260		260

Tags: Accruals, Adjustments, Financial Statements, Insurance, Ledger accounts, lighting and heating, Prepayments, rates, rent, stationery, Trial Balance
Level: Level 1

Topic: Accruals and prepayments

Uploader: Samuel Duah