Question

Weekly The unadjusted trial balance and adjustment data for Blossom Cycle Repair Shop are provided, ons Support BLOSSOM CYCLE REPAIR SHOP Trial Balance January 31, 2021 Debit Credit Cash $3,400 Accounts receivable 6,730 Prepaid insurance 6,420 Supplies 5,240 Land 51.000 Building 190,000 Accumulated depreciation-building $11,000 Equipment 27,000 Accumulated depreciation equipment 4,500 Accounts payable Unearned revenue 22,050 Mortgage payable 182,200 H. Dude, capital 61,000 H. Dude, drawings 100,100 Service revenue 235,650 Salaries expense 115,300 Utilities expense 12,000 Interest expense 5,710 $522,900 $522,900 6,500 Additional information:

Answer 1

Answer:

Work sheet
For the month ended January 31,2021
	Unadjusted Trial balance		Adjustments		Adjusted Trial balance		Income Statement		Balance sheet
Account title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$3,400				$3,400				$3,400
Accounts receivable	$6,730				$6,730				$6,730
Prepaid insurance	$6,420			$1,284	$5,136				$5,136
Supplies	$5,240			$3,930	$1,310				$1,310
Land	$51,000				$51,000				$51,000
Building	$190,000				$190,000				$190,000
Accumulated depreciation-building		$11,000		$317		$11,317				$11,317
Equipment	$27,000				$27,000				$27,000
Accumulated depreciation-equipment		$4,500		$250		$4,750				$4,750
Accounts payable		$6,500				$6,500				$6,500
Interest payable				$911		$911				$911
Unearned revenue		$22,050	$1,300			$20,750				$20,750
Mortgage payable		$182,200				$182,200				$182,200
H. Dude, Capital		$61,000				$61,000				$61,000
H. Dude, Drawings	$100,100				$100,100				$100,100
Service revenue		$235,650		$1,300		$236,950		$236,950
Depreciation expense			$567		$567		$567
Insurance expense			$1,284		$1,284		$1,284
Interest expense	$5,710		$911		$6,621		$6,621
Salaries expense	$115,300				$115,300		$115,300
Supplies expense [5,240 - 1,310]			$3,930		$3,930		$3,930
Utilities expense	$12,000				$12,000		$12,000
Totals	$522,900	$522,900	$7,992	$7,992	$524,378	$524,378	$139,702	$236,950	$384,676	$287,428
Profit							$97,248			$97,248
Totals							$236,950	$236,950	$384,676	$384,676

Calculations:

i. Insurance paid in June 1,2020 for 12 months. It means prepaid insurance balance on Jan .1,2020 showing for 5 months. [12 months - 7 months (June 1,2020 to Dec 31,2020)].

So, Insurance expense for the month of January = $6,420 x 1/5 = $1,284

ii. Supplies expense = Supplies, Unadjusted balance - Supplies, Ending balance = $5,240 - $$1,310 = $3,930

iii. Depreciation expense on building = ($190,000/50 years) x 1/12 = $317

Depreciation expense on equipment = ($27,000/9 years) x 1/12 = $250

iv. Interest expense on mortgage payable = $$182,200 x 6% x 1/12 = $911