Question

Len Kumar started his own consulting firm, Kumar Consulting, on June 1, 2017. The trial balance at June 30 is as follows.

KUMAR CONSULTING Trial Balance June 30, 2017
		Debit		Credit
Cash		$ 6,850
Accounts Receivable		7,000
Supplies		2,007
Prepaid Insurance		2,160
Equipment		15,000
Accounts Payable				$ 4,245
Unearned Service Revenue				5,200
Common Stock				22,007
Service Revenue				8,300
Salaries and Wages Expense		4,000
Rent Expense		2,735
		$39,752		$39,752

In addition to those accounts listed on the trial balance, the chart of accounts for Kumar also contains the following accounts: Accumulated Depreciation—Equipment, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:

1.		Supplies on hand at June 30 total $720.
2.		A utility bill for $280 has not been recorded and will not be paid until next month.
3.		The insurance policy is for a year.
4.		Services were performed for $4,390 of unearned service revenue by the end of the month.
5.		Salaries of $1,390 are accrued at June 30.
6.		The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7.		Invoices representing $4,030 of services performed during the month have not been recorded as of June 30.

Prepare the adjusting entries for the month of June. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 7.

Answer 1

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Len Kumar

First we will calculate adjustment amount. Then we will make adjustment entries.

Event	Workings for adjustment entries	Amount $
1	Supplies Balance	2,007.00
	Less: Unused Supplies	720.00
	Supplies expense	1,287.00
2	Utilities expense Payable	280.00
3	Prepaid Insurance	2,160.00
	Paid for (months)	12.00
	Insurance expense	180.00
4	Service revenue earned	4,390.00
5	Salary and Wages Payable	1,390.00
6	Deprecation Expense- Equipment	250.00
7	Service revenue to be recorded	4,030.00

Adjusting Entries
Event	Account	Debit $	Credit $
1	Supplies Expense	1,287.00
	Supplies		1,287.00
	(being supplies used)
2	Utilities expense	280.00
	Accounts payable		280.00
	(being liability for Utilities expense created)
3	Insurance expense	180.00
	Prepaid Insurance		180.00
	(being Prepaid Insurance expired)
4	Unearned Service Revenue	4,390.00
	Service Revenue		4,390.00
	(being Unearned Service Revenue earned )
5	Salaries and Wages expense	1,390.00
	Salaries and Wages payable		1,390.00
	(being liability for Salaries expense created)
6	Depreciation expense	250.00
	Accumulated Depreciation- Equipment		250.00
	(being Depreciation charged to Equipment)
7	Accounts Receivables	4,030.00
	Service Revenue		4,030.00
	(being invoice for Service Revenue recorded)

Ledger
Cash
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				6,850.00
Accounts Receivables
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				7,000.00
May 31	Adjusting		4,030.00		11,030.00
Supplies
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				2,007.00
May 31	Adjusting			1,287.00	720.00
Prepaid Insurance
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				2,160.00
May 31	Adjusting			180.00	1,980.00
Equipment
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				15,000.00
Accumulated Depreciation- Equipment
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			250.00	250.00
Accounts Payable
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				4,245.00
May 31	Adjusting			280.00	4,525.00 Salaries and Wages payable Ref. Debit Date Explanation May 31 Adjusting Credit 1,390.00 Balance 1,390.00 Unearned Rent Revenue Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting Balance 5,200.00 810.00 4,390.00 1 Common Stock Ref. Debit Credit Date Explanation May 31 Balance Balance 22,007.00 Service Revenue Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting May 31 Adjusting Balance 8,300.00 12,690.00 16,720.00 4,390.00 4,030.00 Salaries and Wages expense Debit Ref. Credit Date Explanation May 31 Balance May 31 Adjusting Balance 4,000.00 5,390.00 1,390.00 Utilities expense Ref. Debit 280.00 Date Explanation May 31 Adjusting Credit Balance 280.00 Insurance expense Ref. Debit 180.00 Date Explanation May 31 Adjusting Credit Balance 180.00 Ref. Supplies Expense Debit 1,287.00 Date Explanation May 31 Adjusting Credit Balance 1,287.00 Depreciation expense Debit 250.00 Ref. Date Explanation May 31 Adjusting Credit Balance 250.00 Rent Expense Ref. Debit Credit Date Explanation May 31 Balance 2,735.00 Credit $ Adjusted Trial Balance Account Titles Debit $ | Cash 6,850.00 Accounts Receivables 11,030.00 Supplies 720.00 Prepaid Insurance 1,980.00 Equipment 15,000.00 Accumulated Depreciation- Equipment Accounts Payable Salaries and Wages payable Unearned Rent Revenue Common Stock Service Revenue Salaries and Wages expense 5,390.00 Utilities expense 280.00 Insurance expense 180.00 Supplies Expense 1,287.00 Depreciation expense 250.00 Rent Expense 2,735.00 Total 45,702.00 250.00 4,525.00 1,390.00 810.00 22,007.00 16,720.00 45,702.00