The Highway Restaurant completed its month end (31st January 2019) trial balance and noted that the following five (6) adjustments to the trial balance still needed to be processed.
1. On Balance Day (31st January 2019) the Highway Restaurant still owed $600 for interest on their mortgage.
2. The Highway Restaurant paid its annual insurance payment of $6,000 on 1st January 2019. The whole $6,000 was recorded as an expense in the trial balance.
3. On Balance Day (31st January 2019) the Highway Restaurant had earned rent income of $600 but had not yet received it.
4. The Wine Society of NZ organised a function at the restaurant which took place on 30th January 2019. The total revenue generated by the function was $12,000. The restaurant had not yet sent out an invoice to the Wine Society and no revenue had yet been recorded.
5. On Balance Day (31st January 2019) the Highway Restaurant still owed $500 for customer feedback cards that were printed on 12th January 2019.
6. The restaurant had received a $1,500 deposit for a wedding function that will take place in May 2019. This $1,500 was recorded as function revenue in the trial balance.
YOUR TASK
The first transaction has been completed for you as an example. Please show the effects of the remaining five (5) adjustments on the Highway Restaurant Trial Balance.
Before you start, read the note below:
When entering your figures in the grid below, please indicate an increase with a + sign and a decrease with a - sign. Do not include the $ sign.
Example: An increase of three thousand dollars is entered as +3000 and a decrease as -3000.
When entering the Balance Day adjustments, please use the following terms: accrued expense, prepayment, income in advance, accrued income.