Question

P3-18 Lira Lopez started her own consulting frm, Lira Consulting, SA on May 1, 2017. Prepare adjusting entries, The trial balance at May 31 is as follows. post to ledger accounts, ans prepare an adjusted trial balance. LIRA CONSULTING, SA Trial Balance May 31, 2017 (LO 5, 6, 7) Account Number Debit Credit RS 7,700 4,000 1,500 2,880 12,000 Cash Accounts Receivable 112 126 130 157 201 209 311 400 726 729 Ll Prepaid Insurance Equipment Accounts Payable Share Capital-Ordinary Salaries and Wages Expense Unearned Service Revenue Service Revenue Rent Expense R$ 4,700 2,600 16,000 8,780 3,000 1,000 R$32,080 R$32,080 In addition to those accounts listed on the trial balance, the chart of accounts for Lira Con- sulting also contains the following accounts and account numbers: No. 158 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, ntian Rynense. No. 722 Insurance Expense, and No. 732 Utilities Expense Other data: 1. R$500 of supplies have been used during the month. 2. Utilities expense incurred but not paid on May 31, 2017, R$200. 3. The insurance policy is for 2 years. 4. R$1,000 of the balance in the Unearned Service Revenue account remains unearned at the end of the month. 5. May 31 is a Tuesday, and employees are paid on Fridays. Lira Consulting has two employees, who are paid R$500 each for a 5-day work week. 6. The equipment has a 5-year life with no residual value. It is being depreciated at R$200 per month for 60 months. 7. Invoices representing R$1,100 of services performed during the month have not been recorded as of May 31. Instructions (a) Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal. (b) Enter the totals from the trial balance as beginning account balances and place a check Adj, trial balance mark in the posting reference column. Post the adjusting entries to the ledger accounts. (c Prenare an adiusted trial balance at May 31, 2017

Answer 1

A	B	C	D	E	F	G	H
2
3		Adjusting Entries are as follows:
4
5		1)
6
7		Supplies expense	500
8
9		Account	Debit	Credit
10		Supplies Expense	500
11		Supplies		500
12
13		2)
14		Account	Debit	Credit
15		Utilities Expense	200
16		Accounts Payable		200
17
18		3)
19		Prepaid insurance	2880
20		Total Period of insurance	24	month
21
22		Insurance Expense per month	120	=D19/D20
23
24		Account	Debit	Credit
25		Insurance Expense	200
26		Prepaid Insurance		200
27
28		4)
29
30		Unearned Revenue Balance in Trial Balance	2600
31		Ending Unearned Revenue Balance	1000
32
33		Unearned Revenue Recognized	1600	=D30-D31
34
35		Account	Debit	Credit
36		Unearned Revenue	$1,600
37		Revenue		$1,600
38
39		5)
40
41		Wage per person per week	500
42		Number of Person	2
43		Number of Week	4	(4 Weeks in a month)
44
45		Wages and Salaries Expense	4000	=D41*D42*D43
46
47
48		Account	Debit	Credit
49		Salaries and Wages Expense	$4,000
50		Salaries and Wages Payable		$4,000
51
52		6)
53
54		Account	Debit	Credit
55		Depreciation Expense	$200
56		Accumulated Depreciation		$200
57
58		7)
59		For unrecorded revenue, accounts receivable is debited and revenue is credited.
60		Account	Debit	Credit
61		Accounts Receivable	$1,100
62		Revenue		$1,100
63