Question

Exerche 401 The trial balance columns of the worksheet for lumber Company at June 30, 2020, are as follows. Cullumber Company Worksheet For the Month Ended June 30, 2020 Trial Balance Account Titles Dr. C. Cash Accounts Receivable 2.400 Supplies 1,900 Accounts Payable 1,100 Uneared Service Revenue 370 Owner's Capital 2,170 Service Revenue 3,700 Salaries and Wages Expense 640 Miscellaneous Expense Total 7,340 7,340 200 Other data: 1. A physical count reveals $300 of supelles on hand 2. $200 of the untamed revenue is still uncanned at month end. 3. Accrued salaries are $270. Complete the worksheet CULLUMBER COMPANY Worksheet Account Titles Ad Trial Balance Account Receivable 2.400 Supplies 1.000 Accounts Payable Uneamed Service Revenge

Answer 1

Account Titles Income Statement Dr. Cr. $ $ $ $ $ $ Trial Balance Dr. Cr. 2,200 2,400 1,900 $ 1,100 $ 370 $ - $ 2,170 $ 3,700 640 CULLUMBER COMPANY Worksheet Month Ended June 30, 2020 Adjustment Adj. Trial Balance Dr. Cr. Dr. Cr. $ 2,200 $ 2,400 $ 1,600 $ 300 $ 1,100 170 $ 200 $ 270 $ 270 $ 2,170 $ 170 $ 3,870 270 $ 910 1,600 $ 1,600 $ 200 2,040 $ 2,040 $ 7,610 $ 7,610 Balance Sheet Dr. Cr. 2,200 2,400 300 $ 1,100 $ 200 $ 270 $ 2,170 Cash Accounts Receivable Supplies Accounts Payable Unearned Service Revenue Accrued Salaries Owner's Capital Service Revenue Salaries and Wages Expense Supplies Expense Miscellaneous Expense Totals Net Income Totals $ $ 3,870 $ $ $ $ $ 200 7,340 $ $ $ $ $ $ 910 1,600 200 2,710 1,160 3,870 $ 7,340 $ $ 3,870 $ 4,900 $ $ $ 3,740 1,160 4,900 $ 3,870 $ 4,900

• Supplies are stock of consumables such as printer cartridges, cleaning supplies, etc. They are written off as expenses once they are consumed. The month-end physical count revealed that the balance of supplies on hand is $300. So, supplies consumed amounting to $1,600 (i.e. $1,900 - $300) is treated as supplies expense. The journal entry is:
  • 
    Accounts Debit Credit Supplies expense $ 1,600 Supplies $ 1,600 (to record consumption of supplies)
    
• Unearned service revenue is the amount received in advance from the customers. It is recognized as revenue once the service is provided. The unearned revenue at the month-end is $200. Therefore, the amount to be recognized as service revenue = $370 - $200 = $170
  • 
    Credit Accounts Debit Unearned Service Revenue $ 170 Service Revenue (to recognize revenue earned) $ 170
    
• Accrued salaries are salary expenses incurred but not paid. A liability, accrued salaries, is created to recognize the expense.
  • 
    Credit Accounts Debit Salaries and Wages Expense $ 270 Accrued Salaries (to record accrued salaries) $ 270
    
• Net Income = Total Revenue - Total Expenses = $3,870 - $2,710 = $1,160