Question

Sharon Lee started her own consulting firm, Lee Consulting, on May 1, 2020. The trial balance at May 31 is as follows. LEE CONSULTING Trial Balance May 31, 2020 Account Number Debit Credit 101 Cash $ 4,600 112 Accounts Receivable 5,900 126 Supplies 2,000 130 Prepaid Insurance 4,800 149 Equipment 10,200 201 Accounts Payable $ 4,200 209 Unearned Service Revenue 1,900 301 Owner’s Capital 18,200 400 Service Revenue 8,100 726 Salaries and Wages Expense 3,500 729 Rent Expense 1,400 $32,400 $32,400 In addition to those accounts listed on the trial balance, the chart of accounts for Lee Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 717 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. $900 of supplies have been used during the month. 2. Utilities expense incurred but not paid on May 31, 2020, $200. 3. The insurance policy is for 2 years. 4. $300 of the balance in the unearned service revenue account remains unearned at the end of the month. 5. May 31 is a Wednesday, and employees are paid on Fridays. Lee Consulting has two employees, who are paid $900 each for a 5-day work week. 6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $170 per month for 60 months. 7. Invoices representing $1,700 of services performed during the month have not been recorded as of May 31. Prepare the adjusting entries for the month of May. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Ref. Debit Credit 1. May 31 631 126 2. May 31 732 201 3. May 31 722 130 4. May 31 209 400 5. May 31 726 212 6. May 31 717 150 7. May 31 112 400 Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. (Post entries in the order of journal entries presented in the previous part.) Cash No. 101 Date Explanation Ref. Debit Credit Balance May 31 Balance √ Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 Supplies No. 126 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 Prepaid Insurance No. 130 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 Equipment No. 149 Date Explanation Ref. Debit Credit Balance May 31 Balance √ Accumulated Depreciation—Equipment No. 150 Date Explanation Ref. Debit Credit Balance May 31 Adjusting J4 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 Unearned Service Revenue No. 209 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 Salaries and Wages Payable No. 212 Date Explanation Ref. Debit Credit Balance May 31 Adjusting J4 Owner’s Capital No. 301 Date Explanation Ref. Debit Credit Balance May 31 Balance √ Service Revenue No. 400 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 May 31 Adjusting J4 Supplies Expense No. 631 Date Explanation Ref. Debit Credit Balance May 31 Adjusting J4 Depreciation Expense No. 717 Date Explanation Ref. Debit Credit Balance May 31 Adjusting J4 Insurance Expense No. 722 Date Explanation Ref. Debit Credit Balance May 31 Adjusting J4 Salaries and Wages Expense No. 726 Date Explanation Ref. Debit Credit Balance May 31 Balance √ May 31 Adjusting J4 Rent Expense No. 729 Date Explanation Ref. Debit Credit Balance May 31 Balance √ Utilities Expense No. 732 Date Explanation Ref. Debit Credit Balance May 31 Adjusting J4 Prepare an adjusted trial balance at May 31, 2020. LEE CONSULTING Adjusted Trial Balance Debit Credit $ $ Totals $ $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Lee Consulting Adjusting Enteries Date Particulars 31.5.2020 Supplies Expense a/c To Supplies (Supplies expensed) Dr. Debit in $ Credit in $ 900 900 Debit in $ Credit in $ 4600 7600 1100 4600 10200 170 Dr. 200 31.5.2020 Utilities expense a/c To Accounts Payable (Expense accrued) 200 4400 200 31.5.2020 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) 4800/24 Adjusted Trial Balance For the Month ending 31.5.2020 No. Particulars 101 Cash 112 Accounts Receivable 126 Supplies 130 Prepaid Insurance 149 Equipment 150 Accum. Depre-Off. Furn. 201 Accounts Payable 209 Unearned Service Revenue 212 Salaries and Wages Payable 301 Owner's Capital 400 Service Revenue 631 Supplies Expense 717 Depreciation Expense 722 Insurance Expense 726 Salaries and Wages Expense 729 Rent Expense 732 Utilities expense Totals 200 300 1080 18200 11400 Dr. 1600 31.5.2020 Unearned Service Revenue a/c To Service Revenue (Revenue earned) 1900 - 300 1600 900 170 200 4580 1400 200 35550 1080 31.5.2020 Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable (Salary expense accrued) 900 x 2 x 3/5 1080 35550 170 31.5.2020 Depreciation Expense a/c Dr. To Accum. Depre - Off. Furn. (To record depreciation) 170 Dr. 1700 31.5.2020 Accounts Receivable a/c To Service Revenue (Revenue earned) 1700

Insurance Expense Supplies Supplies Expense 900 Bal Prepaid Insurance 200 900 200 900 Bal 200 900 200 Supplies 2000 Supplies Expense Bal Bal Prepaid Insurance 4800 Insurance Expense Bal 4800 900 1100 2000 Bal 200 4600 4800 2000 Accounts Payable Utilities expense 200 Bal Salaries and Wages Expense Bal 3500 Salaries and Wages Pa 1080 Bal 4580 200 200 4580 4580 200 1080 Accounts Payable Bal 4400 Utilities expense 4400 Salaries and Wages Payable Salaries and Wages 1080 1080 4200 200 4400 Bal Bal 1080 1900 Service Revenue Bal Unearned Service Revenue 1600 Bal 300 1900 Depreciation Expense Accum. Depre-Off. FL 170 Bal 170 170 170 1900 170 Service Revenue Bal Unearned Service F 11400 Accounts Receivab 11400 Accum. Depre - Off. Furn. Depreciation Expen: 170 170 Bal 8100 1600 1700 11400 Bal 170