Question

Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On January 31, 20Y1, the end of the current year, Sears Editing Company’s accounting clerk prepared the following unadjusted trial balance:

Sears Editing Company

UNADJUSTED TRIAL BALANCE

January 31, 20Y1

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,420.00
2	Accounts Receivable	38,115.00
3	Prepaid Insurance	7,050.00
4	Supplies	1,630.00
5	Land	114,550.00
6	Building	150,250.00
7	Accumulated Depreciation-Building		88,800.00
8	Equipment	133,200.00
9	Accumulated Depreciation-Equipment		96,605.00
10	Accounts Payable		12,560.00
11	Unearned Rent		7,035.00
12	Common Stock		74,980.00
13	Retained Earnings		142,235.00
14	Dividends	15,055.00
15	Fees Earned		327,900.00
16	Salaries and Wages Expense	194,870.00
17	Utilities Expense	42,345.00
18	Advertising Expense	22,335.00
19	Repairs Expense	17,690.00
20	Miscellaneous Expense	5,605.00
21	Totals	750,115.00	750,115.00

The data needed to determine year-end adjustments are as follows:

a.	Unexpired insurance at January 31, $6,130.
b.	Supplies on hand at January 31, $615.
c.	Depreciation of building for the year, $7,610.
d.	Depreciation of equipment for the year, $4,300.
e.	Rent unearned at January 31, $1,490.
f.	Accrued salaries and wages at January 31, $3,040.
g.	Fees earned but unbilled on January 31, $10,865.

	Required:
1.	Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.
2.	Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

X

Chart of Accounts

CHART OF ACCOUNTS
Sears Editing Company
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 13 Prepaid Insurance 14 Supplies 15 Land 16 Building 17 Accumulated Depreciation-Building 18 Equipment 19 Accumulated Depreciation-Equipment LIABILITIES 21 Accounts Payable 22 Unearned Rent 23 Salaries and Wages Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends	REVENUE 41 Fees Earned 42 Rent Revenue EXPENSES 51 Salaries and Wages Expense 52 Utilities Expense 53 Advertising Expense 54 Repairs Expense 55 Depreciation Expense-Building 56 Depreciation Expense-Equipment 57 Insurance Expense 58 Supplies Expense 59 Miscellaneous Expense

X

Journal

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
14
15

X

Adjusted Trial Balance

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

Sears Editing Company

ADJUSTED TRIAL BALANCE

January 31, 20Y1

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable

Answer 1

ACCOUNT TITLE Unadjusted Trail Balance DEBIT CREDIT $ 7,420 $ 38,115 $ 7,050 $ 1,630 $ 1,14,550 $ 1,50,250 $ 88,800 $ 1,33,200 $ 96,605 $ 12.560 $ 7,035 Cash Accounts Receivable Prepaid Insurance Supplies Land Building Accumulated Depreciation-Building Equipment Accumulated Depreciation-Equipment Accounts Payable Unearned Rent Salaries and Wages Expense payable Common Stock Retained Earnings Dividends Fees Earned Rent Revenue Salaries and Wages Expense Utilities Expense Insurance Expenses Supplies Expenses Depreciation Expenses - Building Depreciation Expenses - Equipment Advertising Expense Repairs Expense Miscellaneous Expense Totals $ $ 74,980 1,42,235 Adjustments Adjusted Trail Balance DEBIT CREDIT DEBIT CREDIT $ 7,420 $ 10,865 $ 48,980 $ 920 $ 6,130 $ 1,015 $ 615 $1,14,550 $ 1,50,250 $ 7,610 $ 96,410 $1,33,200 $ 4,300 $ 1,00,905 $ 12,560 $ 5,545 $ 1,490 $ 3,040 $ 3,040 $ 74,980 $ 1,42,235 $ 15,055 $ 10,865 $ 3,38,765 $ 5,545 $ 3,040 $ 1,97,910 $ 42,345 $ 920 $ 920 $ 1,015 $ 1,015 $ 7,610 $ 7,610 $ 4,300 $ 4,300 $ 22,335 $ 17,690 $ 5,605 $ 27,750 $ 33,295 $ 7,75,930 $ 7,75,930 $ 15,055 $ 3,27,900 $ $ 1,94,870 42,345 $ $ $ $ 22,335 17,690 5.605 7,50,115 $ 7,50,115

No Credit Debit $ 920 $ 920 $ 1,015 $ 1,015 | $ 7.610 $ 7,610 Account Title Insurance Expenses Prepaid Insurance Supplies Expenses Supplies Depreciation Expenses - Building Accumulated Depreciation-Building Depreciation Expenses - Equipment Accumulated Depreciation-Equipment Rent Unearned Revenue Rent Revenue Salaries and Wages Expense Salaries and Wages Expense payable Accounts Receivable Fees Earned $ 4,300 $ 4,300 $ 5,545 $ 5,545 $ 3,040 $ 3,040 $ 10,865 $ 10,865
Adjusted Trail Balance and adjustments are cleared given in Singal table