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The unadjusted trial balance of Alston Air Purification System at December 31, 2018, and the data needed for the adjustments follow.

Alston Air Purification System Unadjusted Trial Balance December 31, 2018
	Debit (RM)	Credit (RM)
Cash	7,400
Account Receivable	19,300
Prepaid rent	2,700
Office Supplies	1,100
Equipment	20,000
Accumulated depreciation - Equipment		4,000
Account payable		3,100
Unearned revenue		2,600
Alston, Capital		40,100
Alston, Withdrawals	9,900
Service Revenue		15,400
Salaries expense	3,400
Advertising expense	1,400
	________	________
Total	RM65,200	RM65,200

Adjustment data at December 31 follow:

1. On December 15, Alston contracted to perform services for client receiving RM2,600 in advance. As of December 31, Alston has completed RM1,200 of the services.

2. Alston prepaid two months of rent on 1 December.

3. Alston used RM650 of office supplies during the month.

4. Depreciation for equipment is RM500.

5. Alston received a bill for Decembers online advertising, RM600. Alston will not pay the bill until January.

6. Alston pays its employees weekly on Monday for the previous weeks wages. Its employees earn RM5,500 for a five-day workweek. December 31 falls on Wednesday this year.

7. g On 1 October, Alston agreed to provide a four-month air system check for a customer for RM2,800. Alston has completed the system check every month, but payment has not yet been received and no entries have been made.

Required:

1. Prepare the journal entries to record all the transactions.

2. Prepare the Income Statement for the year ended 31 December 2018.

3. Prepare the Statement of Financial Position as at December 2018.

Solution:

1. Prepare the journal entries to record all the transactions.

No		Debit (RM)	Credit (RM)
a.
b.
c.
d.
e.
f.
g.

Alston Air Purification System Income Statement for the year ended 31 December 2018
	RM	RM

Alston Air Purification System Statement of Financial Position as at 31 December 2018
	RM	RM
Non-current Assets
Current Assets
TOTAL ASSETS
Current Liabilities
Owner Equity
TOTAL LIABILITIES & OWNER EQUITY

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