The following transactions entered into by XYZ Ltd for the year ended 31 December 2017: 1. R18 000 was paid for rent expense for the period of 1 March 2017 to 28 February 2018. The monthly payments were constant throughout this period. 2. Wages and salaries for 2 months are outstanding, R2 000 is paid monthly for wages and salaries. 3. XYZ LTD received a 6-month cleaning service fee of R600 up-front (for 1 January 2018 till 30 June 2018) from Ceasers Ltd. 4. Interest received from BBC Bank for the year amounted to R8 000. The fixed deposit for XYZ LTD at BBC Bank at the beginning of the year was R100 000 and remained unchanged throughout the year. Its maturity date is 31 December 2025. The interest rate is 10% per annum. 5. Skywalk Distributors bought vehicle to the value of R100 000 on 31 March 2017. An amount of R8000 for the current financial year has to be written off as depreciation on vehicle. Additional information The financial year end for XYZ Ltd is 31 December. REQUIRED: Identify and explain the type of adjustment raised in each transaction entered into by XYZ Ltd. Show how each adjustment will be reflected in the general journal for XYZ Ltd for the year ended 31 December 2017. NB: All workings must be shown.
The following transactions entered into by XYZ Ltd for the year ended 31 December 2017:
1. R18 000 was paid for rent expense for the period of 1 March 2017 to 28 February 2018. The monthly
payments were constant throughout this period.
2. Wages and salaries for 2 months are outstanding, R2 000 is paid monthly for wages and salaries.
3. XYZ LTD received a 6-month cleaning service fee of R600 up-front (for 1 January 2018 till 30 June 2018)
from Ceasers Ltd.
4. Interest received from BBC Bank for the year amounted to R8 000. The fixed deposit for XYZ LTD at BBC
Bank at the beginning of the year was R100 000 and remained unchanged throughout the year. Its
maturity date is 31 December 2025. The interest rate is 10% per annum.
5. Skywalk Distributors bought vehicle to the value of R100 000 on 31 March 2017. An amount of R8000 for
the current financial year has to be written off as depreciation on vehicle.
Additional information
The financial year end for XYZ Ltd is 31 December.
REQUIRED:
Identify and explain the type of adjustment raised in each transaction entered into by XYZ Ltd. Show how
each adjustment will be reflected in the general journal for XYZ Ltd for the year ended 31 December 2017.
NB: All workings must be shown.
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