Question

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The December 31, Year 1, unadjusted trial balance for a company is presented below.
  

Accounts	Debit				Credit
Cash	$	8,100
Accounts Receivable		13,100
Prepaid Rent		4,920
Supplies		2,100
Deferred Revenue					$	1,100
Common Stock						11,000
Retained Earnings						4,100
Service Revenue						37,520
Salaries Expense		25,500
	$	53,720			$	53,720

  
At year-end, the following additional information is available:

1. The balance of Prepaid Rent, $4,920, represents payment on October 31, Year 1, for rent from November 1, Year 1, to April 30, Year 2.

2. The balance of Deferred Revenue, $1,100, represents payment in advance from a customer. By the end of the year, $275 of the services have been provided.

3. An additional $700 in salaries is owed to employees at the end of the year but will not be paid until January 4, Year 2.

4. The balance of Supplies, $2,100, represents the amount of office supplies on hand at the beginning of the year of $750 plus an additional $1,350 purchased throughout Year 1. By the end of Year 1, only $610 of supplies remains.

2. Prepare an adjusted trial balance as of December 31, Year 1.
  

Answer 1

Solution:

Adjusted Trial Balance
Account title and explanation	Debit	Credit
Cash	$8,100
Accounts Receivable	$13,100
Prepaid rent (4920*4/6)	$3,280
Supplies (remaining at end)	$610
Deferred revenue (1100-275)		$825
Salaries and wages payable		$700
Common Stock		$11,000
Retained Earnings		$4,100
Service Revenue (37520+275)		$37,795
Salaries and wages expense (25500+700)	$26,200
Rent Expense (4920*2/6)	$1,640
Supplies Expense (2100-610)	$1,490
Total	$54,420	$54,420