Question

2. Use the following adjustment information to complete the Adjustments columns of the work sheet.

a. Depreciation on equipment, $8

b. Accrued salaries, $11

C. The $17 of unearned revenue has been earned

d. Supplies available at December 31, $40

e. Expired insurance, $20

3. Extend the balances in the Adjusted Trial Balance columns of the work sheet to the proper financial statement columns. Compute totals for those columns including net income.

Answer 1

2.

posting entries to understand the accounts that will be impacted

		Dr.	Cr.
a	Depreciation	8
	accumulated dep-equi	8
	(dep for current year will increase dep expense in trial bal and acc dep balance will increase)
b	Salaries	11
	accrued salaries		11
	(accured salaries liab created and salary expense debited for the period will increase salary bal in TB)
c	Unearned revenue	17
	Revenue		17
	(unearned revenue that are now earned will be recognized as income and unearned balance will be reduced)
d	Supplies expense	14
	Supplies		14
	(supplies used during current period will be recorded as expense and supplies asset in TB will be reduced)
e	Insurance	20
	prepaid insurance		20
	(insurance expired will be treated as expense and prepaid balance will be reduced)
Workings:
	Supplies opening	54
	less: Ending	40
	Balance is supplies used	14	54-40

Worksheet Adjustments Dr. Income statement Unadjusted TB Dr. Balance sheet Adjusted Trial balance Dr. Cr. Cr. 0 Account title Cash Accounts receivable Supplies Prepaid insurance equipment Acc. Dep-equip Accounts Payable Salaries Payable Unearned revenue W. Capital W. withdrawls Revenue Dep-equipmet Salary expense Insurance expense Supplies expense Utilities exp Totals Net Income -16 125 142 260 260 279 279 93 142 137 137 49(142-93)

Notes:

Capital balance on balance sheet has been adjusted by adding net income for the current year

capital balance= 82

Add; net income for the year= 49

Total capital= 82+49= 131