Question

The unadjusted trial balance for Novak Corp. is shown below. Assets Liabilities Acc. Accts. Prepd. Depr.- Notes Cash + Rec. + Supplies + Insur. + Equip. . Equip. = Pay. + Bal. 16,050 0 2,940 720 5,500 0 5,500 Accts. Int. Unearned Pay. + Pay. + Serv. Rev. + 2,190 0 2,180 Sal. & Wages Pay. Con + Stoc 0 11,8- Assume the following adjustment data. 1. Supplies on hand at October 31 total $600. 2. Expired insurance for the month is $120. 3. Depreciation for the month is $90. 4. As of October 31, services worth $960 related to the previously recorded unearned revenue had been performed. 5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $350. 6. Interest expense accrued at October 31 is $85. 7. Accrued salaries at October 31 are $1,480. Prepare a tabular summary to record adjustments for the items above using the summary that follows. (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Thank You!

Answer 1

Preparing Tabular Summary to record Adjustment:-

NOVAK CORP.

Tabular Summary

No.							Assets					=					Liabilities					+	Stockholders		Equity
																									Retained		Earnings
	Cash	+	Accounts Receivable	+	Supplies	+	Prepaid Insurance	+	Equipment	-	Accumulated Depreciation, Equipment	=	Notes Payable	+	Accounts Payable	+	Interest Payable	+	Unearned Service Revenue	+	Salaries and Wages Payable	+	Common Stock	+	Revenue	-	Expenses	-	Dividends
Bal.	$16,050	+	$0	+	$2,940	+	$720	+	$5,500	-	$0	=	$5,500	+	$2,190	+	$0	+	$2,180	+	$0	+	$11,840	+	$13,700	-	$9,530	-	$670
1.		+		+	(2,340)	+		+		-		=		+		+		+		+		+		+		-	2,340	-		Supplies Expense
2.		+		+		+	(120)	+		-		=		+		+		+		+		+		+		-	120	-		Insurance Expense
3.		+		+		+		+		-	$90	=		+		+		+		+		+		+		-	90	-		Depreciation Expense
4.		+		+		+		+		-		=		+		+		+	(960)	+		+		+	960	-		-		Service Revenue
5.		+	$350	+		+		+		-		=		+		+		+		+		+		+	350	-		-		Service performed but unbilled
6.		+		+		+		+		-		=		+		+	$85	+		+		+		+		-	85	-		Interest Expense
7.		+		+		+		+		-		=		+		+		+		+	$1,480	+		+		-	1,480	-		Salaries and Wages Expense
Bal.	$16,050	+	$350	+	$600	+	$600	+	$5,500	-	$90	=	$5,500	+	$2,190	+	$85	+	$1,220	+	$1,480	+	$11,840	+	$15,010	-	$13,645	-	$670

Working Notes:-

1. Supplies Expense=(Supplies - Supplies on hand at the end)

=$(2,940-600)

=$2,340

Preparing Adjusting Entries:-

NOVAK CORP.

General Journal (Adjusting Entries)

October 31

Date	Accounts Title	Debit	Credit
October 31	Supplies Expense ($2940-$600)	$2,340
	Supplies		$2,340
October 31	Insurance Expense	$120
	Prepaid Insurance		$120
October 31	Depreciation Expense	$90
	Accumulated Depreciation, Equipment		$90
October 31	Unearned Service Revenue	$960
	Service Revenue		$960
October 31	Accounts Receivable	$350
	Service Revenue		$350
October 31	Interest Expense	$85
	Interest Payable		$85
October 31	Salaries and Wages Expense	$1,480
	Salaries and Wages Payable		$1,480