Neco 2022 Financial Accounting Question 5

The following trial balance of XYZ Ltd. is extracted from the ledger at 31 December 2023 (all figures in Naira): Cash Dr 150,000 Accounts Receivable Dr 80,000 Inventory Dr 120,000 Prepaid Insurance Dr 30,000 Equipment Dr 200,000 Accumulated Depreciation Cr 40,000 Accounts Payable Cr 70,000 Salaries Payable Cr 15,000 Share Capital Cr 300,000 Retained Earnings Cr 45,000 Sales Revenue Cr 500,000 Cost of Goods Sold Dr 300,000 Salaries Expense Dr 120,000 Rent Expense Dr 50,000 Adjustments required at year‑end: 1. Depreciate equipment at 10% per annum. 2. The prepaid insurance of N30,000 relates to a 12‑month policy; six months have elapsed. 3. Electricity expense of N8,000 has been incurred but not yet recorded. 4. Bad debts are estimated at 5% of accounts receivable. Using the above information, answer the following: (a) Compute the amount of each adjusting entry. (b) Prepare the adjusted trial balance and state whether it balances.