Question

SecHD C1 - The trial balance of Smith Company at December 31, 2019 is shown below. [SK2: 10 marks) Credit Smith Company Trial Balance December 31, 2019 Accounts Debit Cash 75,000 Prepaid Insurance 165.000 Supplies 82,500 Equipment 1.800.000 Accumulated Depreciation - Equipment Notes Payable Accounts Payable Smith, Capital Smith, Drawings 180.000 Service Revenue Utilities Experise 30,000 Total 2,332,500 337,500 300,000 180,000 1.147.500 367,500 2,332,500 Other information: 1. Depreciation of equipment for December was $30,000 2. Rent owed for the month of December but will not be paid until January, 2020 was $45,000. 3. The amount of insurance that expired in the month of December was $15,000 4. Salaries owed for the month of December but will not be paid until January, 2020 was $60,000. 5. A physical count of supplies indicates $22,500 on hand at December 31. Required: a. Prepare the adjusting entries required on December 31, 2019. (5 marks) b. Prepare the adjusted trial balance on December 31, 2019. (5 marks)

Answer 1

Answers

--Requirement [a]

	Accounts title	Debit	Credit
#1	Depreciation expense - Equipment	$30,000
	Accumulated depreciation - Equipment		$30,000
#2	Rent Expense	$45,000
	Rent Payable		$45,000
#3	Insurance expense	$15,000
	Prepaid Insurance		$15,000
#4	Salaries expense	$60,000
	Salaries Payable		$60,000
#5	Supplies expense ($82500 - 22500)	$60,000
	Supplies		$60,000

--Requirement [b]

Adjusted Trial Balance
Accounts	Debit	Credit
Cash	$75,000
Prepaid Insurance (165000 - 15000)	$150,000
Supplies	$22,500
Equipment	$1,800,000
Accumulated Depreciation - Equipment (337500 + 30000)		$367,500
Notes payable		$300,000
Accounts Payable		$180,000
Salaries Payable		$60,000
Rent Payable		$45,000
Smith, Capital		$1,147,500
Smith, Drawings	$180,000
Service Revenue		$367,500
Utilities expense	$30,000
Depreciation expense - Equipment	$30,000
Rent Expense	$45,000
Insurance expense	$15,000
Salaries expense	$60,000
Supplies expense	$60,000
Total	$2,467,500	$2,467,500