Question

the unadjusted trial balance for sandhill engineering at its year end , december 31,2021

Help System Announcements Exercise 4-9 The unadjusted trial balance for Sandhill Engineering at its year end, December 31, 2021, is as follows: Credit SANDHILL ENGINEERING Trial Balance December 31, 2021 Debit Cash $8,300 Accounts receivable 6,750 Supplies 5,150 Prepaid insurance 7,440 Notes receivable 12,400 Equipment 27,000 Accumulated depreciation equipment Accounts payable H. Duguay, capital H. Duguay, drawings 53,500 Service revenue Salaries expense 39,500 $160,040 $8,100 5,000 33,940 113,000 $160,040 Additional information: 1. Services of $10,250 was provided but unrecorded and uncollected as at December 31, 2021. 2. On June 1, the company purchased a one-year Insurance policy. 3. Depreciation on the equipment for 2021 is $2,700. 4. A count on December 31, 2021, showed $1,700 of supplies on hand. 5. The four-month, 4% note receivable was issued on October 1, 2021. Interest and principal are payable on the maturity date. earch

Answer 1

Adjusting journal entries

Date	account and explalnation	Debit	Credit
Dec.31	Account Recievable	10,250
	Service Revenue		10,250
	(Services provided but not recorded)
Dec.31	Insurance expenses	4,340
	Prepaid insurance		4,340
	(Prepaid insurance expired for 7 months)
Dec.31	Depreciation expenses	2,700
	Accumulated depreciation- equipment		2,700
	(Depreciation expense recorded)
Dec31	Supplies Expenses	3,450
	Supplies		3,450
	(Supplies used during the year)
Dec 31	Interest Recievable	124
	Interest Revenue		124
	(Intrest earned but not received for 3 months)

Account Recievable

Dec 31	6,750
Dec31	10,250
Bal	17,000

Interest Receivable

Dec 31

124

Prepaid Insurance

Dec 31	7,440	Dec 31	4,340
Bal	3,100

Supplies

Dec 31	5,150	Dec 31	3,450
Bal	1,700

Accumulated Depreciation- Equipment

		Dec 31	8,100
		Dec 31	2,700
		Bal	10,800

Service Revenue

		Dec 31	113,000
		Dec 31	10,250
		Bal	123,250

Interest revenue

Dec 31

124

Supplies expenses

Dec 31

3,450

Depreciation expense

Dec 31

2,700

Insurance expenses

Dec 31

4,340

Closing Entries

Date	Account & explanation	Debit	Credit
Dec31	Service Revenue	123,250
	Interest Revenue	124
	Income Summary		123,374
	(To close revenue account)
Dec 31	Income Summary	49,990
	Salaries expenses		39,500
	Insurance expenses		4,340
	Depreciation expense		2,700
	Supplies expenses		3,450
	(To close expenses Account)
Dec 31	Income Summary	73,384
	H. Dugay, Capital		73,384
	(To close profit to capital Account)
Dec 31	H. Dugay, capital	113,000
	H.dugay, Drawing		113,000
	(To close drawings Account)

Working notes

2. Insurance policy purchased on June 1

So, prepaid expenses expired for 7 months

So insurance expenses= 7,440 × 7 months/12 months

=4,340

4. Supplies in hand is 1,700 that means

Supplies used = 5,150 - 1,700

5. Interest Revenue

12,400×4%×3 months/12 months=124