Question

Trial Balance and Adjusting Entries Photomake, Inc., a commercial photography studio, has just completed its first full year of operations on December 31. The general ledger account balances before year-end adjustments follow. No adjusting entries have been made to the accounts at any time during the year. Assume that all balances are normal. Cash $2,365 Accounts Payable Accounts Receivable 4180 Unearned Photography Fees 2.860 26.400 Prepaid insurance 3.267 Photography Fees Eamed 37,928 Supplies 4,675 Wages Expense 12,100 Equipment 25.080 Utilities Expense 3.762 $2101 An analysis of the firm's records discloses the following items: 1. Photography services of $935 have been rendered, but customers have not yet been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed 2. The equipment, purchased January 1, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $440 but the bill will not arrive until January of next year. 4. The balance in Prepaid Rent represents the amount paid on January 1, for a 2 year lease on the studio 5. In November, customers paid $2,860 in advance for pictures to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31, all fees are eamed. 6. A 3 year insurance premium paid on January 1, was debited to Prepaid Insurance, Required a. Prove that the sum of the debits equals the sum of the credits for Photomake's unadjusted account balances by preparing an unadjusted trail balance as of December 31. T

Answer 1

Unadjusted Trial Balance :

Photomaker Inc
Unadjusted Trial Balance
31-Dec
Accounts	Debit	Credit
Cash	2,365.00
Account Receivable	4,180.00
Prepaid Rent	13,860.00
Prepaid Insurance	3,267.00
Supplies	4,675.00
Equipment	25,080.00
Accounts Payable		2,101.00
Unearned Phtography Fees		2,860.00
Common Stock		26,400.00
Photography Fees Earned		37,928.00
Wages Expenses	12,100.00
Utitlities Expenses	3,762.00
Total	69,289.00	69,289.00

Adjusting Journal Entries :

Accounts	Debit	Credit
Account fees receivable	935.00
Photography Fees Earned		935.00
To record revenues earned but not billed
Depreciation on Equipment	2,508.00
Equipment		2,508.00
To record depreciation during the year
Utilities Expenses	440.00
Accounts Payable		440.00
To record estimated December utilities expenses
Rent Expenses	6,930.00
Prepaid Rent		6,930.00
To record rent expenses during the year
Unearned Photography Fees	2,860.00
Photography Fees Earned		2,860.00
To record advance payment earned during the year
Insurance Expenses	1,089.00
Prepaid Insurance		1,089.00
To record Insurance expenses during the year
Supplies Expenses	2,310.00
Supplies		2,310.00
To record supplies expense during the year
Wages	413.00
Wages Payable		413.00
To record unpaid wages at December 31