Question

1. Adjusting Entries and Adjusted Trial Balances

   Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services’ accounting clerk prepared the following unadjusted trial balance at July 31, 20Y6:
   

   Reece Financial Services Co.
   Unadjusted Trial Balance
   July 31, 20Y6
   	Debit Balances		Credit Balances
   Cash	10,200
   Accounts Receivable	34,750
   Prepaid Insurance	6,000
   Supplies	1,725
   Land	50,000
   Building	155,750
   Accumulated Depreciation—Building			62,850
   Equipment	45,000
   Accumulated Depreciation—Equipment			17,650
   Accounts Payable			3,750
   Unearned Rent			3,600
   Joni Reece, Capital			153,550
   Joni Reece, Drawing	8,000
   Fees Earned			158,600
   Salaries and Wages Expense	56,850
   Utilities Expense	14,100
   Advertising Expense	7,500
   Repairs Expense	6,100
   Miscellaneous Expense	4,025
   	400,000		400,000

   The data needed to determine year-end adjustments are as follows:

   Required:

   • Depreciation of building for the year, $6,400.
   • Depreciation of equipment for the year, $2,800.
   • Accrued salaries and wages at July 31, $900.
   • Unexpired insurance at July 31, $1,500.
   • Fees earned but unbilled on July 31, $10,200.
   • Supplies on hand at July 31, $615.
   • Rent unearned at July 31, $300.

   1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation Expense—Building, Depreciation Expense—Equipment, and Supplies Expense. If an amount box does not require an entry, leave it blank.

   20Y6 July 31
   31
   31
   31
   31
   31
   31

   2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

   Reece Financial Services Co.
   Adjusted Trial Balance
   July 31, 20Y6
   	Debit Balances	Credit Balances

Check My Work

Answer 1

credit Debit 6,400 $ $ $ 6,400 $ 2,800 $ 2,800 $ 900 $ 900 $ $ 4,500 Date Accounts and Explanation 20Y6. July 31 Depreciation Expense Accumulated Depreciation - Building (To record depreciation expense) 31 Depreciation Expense Accumulated Depreciation - Equipment (To record depreciation expense) 31 Salaries and Wages Expense Salaries and Wages Payable (To record salaries and Wages expense) 31 Insurance Expense Prepaid Insurance (To record insurance expense) 31 Accounts Receivables Fees Earned (To record fees earned) 31 Supplies Expense Supplies (To record supplies expense) 31 Unearned Rent Rent Revenue (To record rent revenue) $ 4,500 $ 10,200 $ 10,200 $ 1,110 $ 1,110 $ 3,300 $ 3,300

$ $ Reece Financial Services Co. Adjusted Trial Balance July 31, 2016 Debit Balances Credit balances Cash $ 10,200 Accounts receivables $ 44,950 Prepaid Insurance $ 1,500 Supplies $ 615 Land $ 50,000 Building $ 155,750 Accumulated Depreciation - Building $ 69,250 Equipment $ 45,000 Accumulated depreciation -Equipment $ 20,450 Accounts Payable $ 3,750 Unearned Rent $ 300 Salaries and Wages Payable $ 900 Joni Reece, Capital $ 153,550 Joni Reece, Drawing $ 8,000 Fees Earned $ 168,800 Rent Revenue $ 3,300 Salaries and Wages Expense $ 57,750 Utilities Expenses $ 14,100 Depreciation Expense $ 9,200 Supplies Expense $ 1,110

S Insurance Expense Advertising Expense Repairs Expense Miscellenious Expense Totals $ $ $ $ 4,500 7,500 6,100 4,025 420,300 $ 420,300 Working Notes: Insurance Expense = $6,000-$1,500 = $4,500 Supplies Expense = $1,725-$615 = $1,110 Rent Revenue = $3,600-$300 = $3,300 Accounts Receivables = $34,750+$10,200 = $44,950 Accumulated Depreciation - equipment = $17,650+$2,800 = $20,450 Accumulated Depreciation - Building = $62,850+$6,400 = $69,250 Fees Earned = $158,600+$10,200 = $168,800 Salaries and Wages Expense = $56,850+$900 = $57,750 Depreciation Expense = $6,400+$2,800 = $9,200