Reference no: EM132996742

QUESTION - Based on the Unadjusted Trial Balance of Cleanshine Products and Services for the financial year ended 31 December 2020, the following additional information is provided by the company's accountant:

i) The Prepaid Insurance RM2,100 was paid on April 2020, for the coverage of 12 months from 1^st April 2020 to 31^st March 2021.

ii) Salaries and Wages Expense for December 2020 amounting to RM2,600 was omitted from the book. The salary and wages will be paid on 5^th January 2021.

iii) The Unearned Revenue refers to a cleaning services contract with a client amounting to RM920 per month for three months, November 2020 until January 2021. As at 31^st December 2020, cleaning services for November and December 2020 were successfully delivered.

iv) Monthly rent expense is RM1,200. However, the accountant of Cleanshine was wrongly entered the rent expense for December 2020 as RM120 on both sides of the record (i.e. Dr. Rent Expense - December RM120, Cr. Cash RM120. Thus, the total rent expense Is understated, cash overstated and need correction.

v) Depreciation expense for equipment is calculated based on straight line method. The equipment is depreciated at 10% over cost with no residual value. The depreciation for the year 2020 has not been recorded yet in the book.

Required -

a. Prepare journal adjusting journal entries for additional information i) to v).

b. Prepare income statement for the year ended 31 December 2020.