Question

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019 the end of the current year, Pitman Company’s accounting clerk prepared the following unadjusted trial balance:

Pitman Company

UNADJUSTED TRIAL BALANCE

October 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,420.00
2	Accounts Receivable	38,360.00
3	Prepaid Insurance	7,320.00
4	Supplies	2,390.00
5	Land	117,000.00
6	Building	154,900.00
7	Accumulated Depreciation-Building		85,745.00
8	Equipment	130,900.00
9	Accumulated Depreciation-Equipment		97,550.00
10	Accounts Payable		11,735.00
11	Unearned Rent		7,130.00
12	Jan Pitman, Capital		227,645.00
13	Jan Pitman, Drawing	14,705.00
14	Fees Earned		325,550.00
15	Salaries and Wages Expense	193,870.00
16	Utilities Expense	42,220.00
17	Advertising Expense	22,740.00
18	Repairs Expense	17,455.00
19	Miscellaneous Expense	6,075.00
20	Totals	755,355.00	755,355.00

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

a.	Unexpired insurance at October 31, $5,850.
b.	Supplies on hand at October 31, $310.
c.	Depreciation of building for the year, $7,750.
d.	Depreciation of equipment for the year, $4,220.
e.	Unearned rent at October 31, $1,495.
f.	Accrued salaries and wages at October 31, $3,040.
g.	Fees earned but unbilled on October 31, $11,185.

	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.

CHART OF ACCOUNTS
Pitman 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 Jan Pitman, Capital 32 Jan Pitman, Drawing	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

Answer 1

a.	Insurance Expense	$          1,470
	Prepaid Insurance		$          1,470
	(7320-5850)
b.	Supplies Expense	$          2,080
	Supplies		$          2,080
	(2390-310)
c.	depriciation Expense-builidng	$          7,750
	Accumulated depriciation-builidng		$          7,750
d	Depriciation Expense-Equipment	$          4,220
	Accumulated depriciation-Equipment		$          4,220
e	Unearned rent	$          5,635
	Rent revenue		$          5,635
	(7130-1495)
f	Salaries & wages expenses	$          3,040
	Salaries & wages expenses payable		$          3,040
g	Accounts receiveable	$        11,185
	Fees earned		$        11,185

	Unadjusted trial balance		Adjustments		Adjusted trial balance
Items	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$            7,420				$               7,420
Accounts Receivable	$          38,360		$        11,185		$            49,545
Prepaid Insurance	$            7,320			$          1,470	$               5,850
Supplies	$            2,390			$          2,080	$                  310
Land	$       117,000				$          117,000
Building	$       154,900				$          154,900
Accumulated depriciation-builidng		$          85,745		$          7,750		$            93,495
Equipment	$       130,900				$          130,900
Accumulated depriciation-Equipment		$          97,550		$          4,220		$          101,770
Accounts Payable		$          11,735				$            11,735
Unearned Rent		$            7,130	$          5,635			$               1,495
Jan Pitman , capital		$       227,645				$          227,645
Jan Pitman , Drawing	$          14,705				$            14,705
Fees Earned		$       325,550		$        11,185		$          336,735
Salaries & wages expenses	$       193,870		$          3,040		$          196,910
Utilities Expenses	$          42,220				$            42,220
Advt. Expenses	$          22,740				$            22,740
Repairs Expenses	$          17,455				$            17,455
Misc. Expenses	$            6,075				$               6,075
Insurance Expense			$          1,470		$               1,470
Supplies Expense			$          2,080		$               2,080
depriciation Expense-builidng			$          7,750		$               7,750
Depriciation Expense-Equipment			$          4,220		$               4,220
Rent revenue				$          5,635		$               5,635
Salaries & wages expenses payable				$          3,040		$               3,040
	$       755,355	$       755,355	$        35,380	$        35,380	$          781,550	$          781,550