ABC Ltd began operations on 1 July 2014.  Quarterly financial statements are prepared.  The trial balance and adjusted trial balance on 30 September are shown below.
ABC LTD
Trial Balances
As at 30 September 2014

        Unadjusted    Adjusted
No.     Account name    Debit -$    Credit-$    Debit- $    Credit-$
100    Cash    17420        17420    
110    Commission Receivable    1040        2600    
120    Prepaid rent    3900        2340    
130    Supplies    3120        2600    
150    Equipment    39000        39000    
151    Accumulated Depreciation –  Equipment
                910
200    Accounts Payable        3926        3926
210    Salaries Payable                1040
220    Interest Payable                130
230    Rent revenue received in Advanced         2340        1560
250    Bank Loan (Due 31.12.2018)        13000        13000
300    Share Capital        36400        36400
310    Retained Earnings         _        _
311    Dividends    1560        1560    
400    Commission Revenue        36400        37960
410    Rent Revenue        1040        1820
500    Salaries Expense    23400        24440    
510    Rent Expense    2340        3900    
520    Depreciation Expense            910    
530    Supplies Expense             520    
540    Electricity Expense    1326        1326    
550    Interest Expense            130    
        93106    93106    96746    96746

Required: (11 + 4 + 3 + 5 + 1 + 1 = 25 marks)
(a)    Journalise the adjusting entries that were made by ABC Ltd on 30 September            (11 marks)
(b)    Prepare the following:
a.    An income statement for the 3 months ending 30 September                (4 marks)
b.    A statement of changes in equity for the 3 months ending 30 September             (3 marks)
c.    Prepare a statement of financial position as at 30 September                (5 marks)
(c)    Identify which accounts should be closed on 30 September                    (1 mark)
(d)    If the interest rate on the loan is 12%, when did ABC Ltd take out the loan?              (1 mark)
Show all your working

Question 2     (2 + 2 = 4 marks)
(a)    What is a trial balance and what is its main purpose?                         (2 marks)
 (b)    Distinguish between the two categories of adjusting entries, and identify the two types of adjustments applicable to each category, giving an example of each.                        (2 marks)


Overall presentation (1 mark)
Meeting overall presentation requirements                           

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