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Following is the trial balance of Saqib & Co. on December 31, 2003:
Debit Credit Cash 40,000 Accounts receivable 60,000 Allowance for doubtful debts 1,000 Merchandise inventory 40,000 Pre-paid salaries 12,000 Equipment 80,000 Allowance for Dep. equipment 5,000 Accounts payable 20,000 Saqib's Capital 100,000 Commission income 20,000 Sales 428,000 Cost of goods sold 246,000 Salaries expense 66,000 Office supplies expense 10,000 Rent expense 12,800 Insurance expense 7,200 574,000 574,000
(Case 1) If salaries expense for the year was Rs. 3,600
(Case 2) lf prepaid salaries on December 31, 2003 were Rs. 8,000
(Case 3) If salaries payable on December 31, 2003 were Rs. 4,500
Required:
(a) Give adjusting entries of the following information, considering each case separately: also
(b) Mention what amount of salaries expenses, salaries payable and prepaid salaries should be reported in the income statement and balance sheet.
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