Question

The Trial Balance of Hokomo Trading showed the following account balances as at 30 June 2016.

Accounts

RM

RM

Machinery

25,000

Accounts receivable

18,000

Accounts payable

12,000

Insurance expenses

2,760

Commission received

1,480

Provision for bad debts

560

Provision for discount allowed

280

Provision for depreciation on machinery

4,750

Required:

(a) Prepare Journal Entries for the following adjustments:

i.       To write off RM2,000 as bad debts.

ii.      To make 5% provision for bad debts.

iii.     To make 2% provision for discount allowed.

iv.    To make 1% provision for discount received.

v. To provide depreciation on machinery at the rate of 20% per annum by reducing balance method.

vi.    1/3 of the insurance expenses were paid in advance.

vii. Commission received accrued RM820.

Accounts

RM

RM

Machinery

25,000

 

Accounts receivable

18,000

 

Accounts payable

 

12,000

Insurance expenses

2,760

 

Commission received

 

1,480

Provision for bad debts

 

560

Provision for discount allowed

 

280

Provision for depreciation on machinery

 

4,750