Following account balances were taken from the ledger of Umair Supply Company as on 31 December 2019:- Accounts Payable Rs. 27,500 Land Rs. 550,000 Accounts Receivable 56,000 Note Payable 140,100 Advertising 4,000 Office expenses 13,400 Building 600,

Let's break down the requirements step by step. ### i. Prepare Necessary Adjusting Accounting Entries Given the adjustments provided, here are the adjusting journal entries: 1. **Inventory Adjustment:** - **Debit**: Inventory (Increase) Rs. 18,850 (Rs. 72,850 - Rs. 54,000 Opening Inventory) - **Credit**: Cost of Goods Sold Rs. 18,850 2. **Depreciation on Building:** - **Debit**: Depreciation Expense Rs. 60,000 (10% of Rs. 600,000) - **Credit**: Accumulated Depreciation - Building Rs. 60,000 3. **Accrued Selling Expenses:** - **Debit**: Selling Expense Rs. 14,000 - **Credit**: Accrued Liabilities Rs. 14,000 4. **Insurance Adjustment:** - **Debit**: Insurance Expense Rs. 6,000 (Rs. 12,000 - Rs. 6,000 unexpired) - **Credit**: Prepaid Insurance Rs. 6,000 5. **Outstanding Utilities Bills:** - **Debit**: Utilities Expense Rs. 6,300 - **Credit**: Accrued Liabilities Rs. 6,300 ### ii. Prepare 10-Column Worksheet Here’s a simplified 10-column worksheet layout: | Account Titles | Trial Balance | Adjustments | Adjusted Trial Balance | Income Statement | Balance Sheet | Income | Expenses | Totals | Closing Balances | |---------------------------|---------------|-------------|------------------------|-------------------|----------------|--------|----------|--------|------------------| | Accounts Payable | 27,500 | | 27,500 | | 27,500 | | | | | | Accounts Receivable | 56,000 | | 56,000 | | 56,000 | | | | | | Inventory | 54,000 | 18,850 | 72,850 | | | | | | | | Cash | 20,000 | | 20,000 | | 20,000 | | | | | | Land | 550,000 | | 550,000 | | 550,000 | | | | | | Building | 600,000 | | 600,000 | | 600,000 | | | | | | Accumulated Depreciation | | 60,000 | (60,000) | | | | | | | | Capital | 905,000 | | 905,000 | | | | | | | | Note Payable | 140,100 | | 140,100 | | | | | | | | Sales | 920,000 | | 920,000 | 920,000 | | 920,000| | 920,000 | | | Purchases | 615,000 | | 615,000 | | | | | | | | Advertising | 4,000 | | 4,000 | | | | | | | | Office Expenses | 13,400 | | 13,400 | | | | | | | | Selling Expenses | 41,200 | 14,000 | 55,200 | | | | 55,200 | | | | Interest Expense | 2,200 | | 2,200 | | | | 2,200 | | | | Utilities Expenses | 20,100 | 6,300 | 26,400 | | | | 26,400 | | | | Interest Income | 500 | | 500 | 500 | | | | | | | | | | | | | | | | | | **Total** | **2,285,100** | **107,450** | **2,392,550** | **920,500** | **2,393,000** | **920,000**| **83,600**| **1,003,600**| | ### iii. Prepare Income Statement **Umair Supply Company** **Income Statement** **For the Year Ended December 31, 2019** | **Income** | | |--------------------------|----------------| | Sales | Rs. 920,000 | | Less: Cost of Goods Sold | Rs. 615,000 | | **Gross Profit** | Rs. 305,000 | | **Operating Expenses** | | | Advertising | Rs. 4,000 | | Selling Expenses | Rs. 55,200 | | Office Expenses | Rs. 13,400 | | Utilities Expenses | Rs. 26,400 | | Depreciation Expense | Rs. 60,000 | | Insurance Expense | Rs. 6,000 | | Interest Expense | Rs. 2,200 | | **Total Expenses** | Rs. 167,200 | | **Net Income** | Rs. 137,800 | ### iv. Prepare Retained Earnings Statement **Umair Supply Company** **Retained Earnings Statement** **For the Year Ended December 31, 2019** | | | |-------------------|----------------| | Beginning Retained Earnings | Rs. 0 | | Add: Net Income | Rs. 137,800 | | Less: Dividends | Rs. 0 | | **Ending Retained Earnings** | Rs. 137,800 | ### v. Prepare Balance Sheet **Umair Supply Company** **Balance Sheet** **As at December 31, 2019** | **Assets** | | |---------------------------------|----------------| | Current Assets | | | Cash | Rs. 20,000 | | Accounts Receivable | Rs. 56,000 | | Inventory | Rs. 72,850 | | Prepaid Insurance | Rs. 6,000 | | **Total Current Assets** | Rs. 154,850 | | Non-Current Assets | | | Land | Rs. 550,000 | | Building | Rs. 600,000 | | Less: Accumulated Depreciation | Rs. 60,000 | | **Total Non-Current Assets** | Rs. 1,090,000 | | **Total Assets** | Rs. 1,244,850 | | **Liabilities & Equity** | | |---------------------------------|----------------| | Current Liabilities | | | Accounts Payable | Rs. 27,500 | | Accrued Liabilities | Rs. 20,300 | | **Total Current Liabilities** | Rs. 47,800 | | Long-term Liabilities | | | Note Payable | Rs. 140,100 | | **Total Liabilities** | Rs. 187,900 | | Equity | | | Capital | Rs. 905,000 | | Retained Earnings | Rs. 137,800 | | **Total Equity** | Rs. 1,042,800 | | **Total Liabilities & Equity** | Rs. 1,244,850 | ### vi. Prepare Closing Entries 1. **Close Revenue Accounts:** - **Debit**: Sales Rs. 920,000 - **Credit**: Income Summary Rs. 920,000 2. **Close Expense Accounts:** - **Debit**: Income Summary Rs. 782,200 (Total Expenses) - **Credit**: Advertising Rs. 4,000 - **Credit**: Selling Expenses Rs. 55,200 - **Credit**: Office Expenses Rs. 13,400 - **Credit**: Utilities Expenses Rs. 26,400 - **Credit**: Interest Expense Rs. 2,200 - **Credit**: Depreciation Expense Rs. 60,000 - **Credit**: Insurance Expense Rs. 6,000 3. **Close Income Summary to Retained Earnings:** - **Debit**: Income Summary Rs. 137,800 - **Credit**: Retained Earnings Rs. 137,800 ### vii. Prepare Post Closing Trial Balance **Umair Supply Company** **Post Closing Trial Balance** **As at December 31, 2019** | Account Titles | Debit | Credit | |------------------------|---------------|--------------| | Cash | Rs. 20,000 | | | Accounts Receivable | Rs. 56,000 | | | Inventory | Rs. 72,850 | | | Prepaid Insurance | Rs. 6,000 | | | Land | Rs. 550,000 | | | Building | Rs. 600,000 | | | Accumulated Depreciation | | Rs. 60,000 | | Accounts Payable | | Rs. 27,500 | | Accrued Liabilities | | Rs. 20,300 | | Note Payable | | Rs. 140,100 | | Capital | Rs. 905,000 | | | Retained Earnings | Rs. 137,800 | | | **Total** | **Rs. 2,411,650** | **Rs. 2,411,650** | This concludes the required financial statements and entries for Umair Supply Company as of December 31, 2019. The numbers may need verification and adjustment based on actual context or additional details not provided.