POA Practice 1 - Pink Bull

Max is the sole owner of Pink Bull Information from the accounts of the business for the year ended 31 March 2023 was as follows. 1. On 1 April 2022, the rental income receivable account had a balance of $51 600. 2. The business received cheques of $24 000 for rental income during the year. 3. Annual rental income for the year ended 31 March 2023 amounted to $21 000. (a) Prepare the journal entries to account for rental income, including the closing entry, for the financial year ended 31 March 2023. Narrations are not required. Journal ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ (b) State the effect and amount on the following if the rental income is not adjusted for the year ended 31 March 2023. Profit Current Liability Current Asset Effect Amount (c) State the accounting theory applied to the adjustments of rental income. ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________