Question

Problem 3-01A a-c Mary Smith started her own consulting firm, Smith Consulting, on May 1, 2020. The trial balance at May 31 is as follows. SMITH CONSULTING Trial Balance May 31, 2020 Credit Account Number 101 Debit $ 4,400 5,800 1,700 112 126 130 2,400 10,200 149 201 Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accounts Payable Unearned Service Revenue Owner's Capital Service Revenue Salaries and Wages Expense Rent Expense $ 4,200 209 301 400 726 1,900 15,200 7,500 3,300 1,000 729 $28,800 $28,800 In addition to those accounts listed on the trial balance, the chart of accounts for Smith Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 717 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. 2. 3 3. $700 of supplies have been used during the month. Utilities expense incurred but not paid on May 31, 2020, $200. The insurance policy is for 2 years. $400 of the balance in the unearned service revenue account remains unearned at the end of the month. May 31 is a Wednesday, and employees are paid on Fridays. Smith Consulting has two employees, who are paid $800 each for a 5-day work week. The office furniture has a 5-year life with no salvage value. It is being depreciated at $170 per month for 60 months. Invoices representing $1,500 of services performed during the month have not been recorded as of May 31. 5. 6. 7.

Answer 1

In the Books of Smith Consulting
Adjusting Entries
No.	Date	Account Titles and Explanation	Ref	Debit	Credit
1
May	Supplies Expense	631	$700
31
	Supplies	126		$700
	Being adjustment for supplies used (Supplies balance less cost of supplies available)
2
May	Utilities Expense	732	$200
31
	Accounts Payable	201		$200
	(Adjusting entry for accrued Utilities Expense for May)
3
May	Insurance Expense	722	$100
31
	Prepaid Insurance	130		$100
	(Being the Insurance expense due for the month of May and adjusted from Prepaid expense i.e $2,400/24)
4
May	Unearned Service Revenue	209	$400
31
	Service Revenue	400		$400
	(To adjust unearned revenue to reflect earned portion )
5
May	Salaries & Wages Expense	726	$1,600
31
	Salaries & Wages Payable	212		$1,600
	(Adjusting entry for accrued salaries & wages for May)
6
May	Depreciation Expense	717	$170
31
	Accumulated Depreciation- Equipments	150		$170
	(To record the current months depreciation of the Equipment)
7
May	Accounts Receivable	112	$1,500
31
	Service Revenue	400		$1,500
	(Adjustment of unrecorded Service Revenue)
LEDGER ACCOUNTS
Cash						No. 101
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$4,400		$4,400
Accounts Receivable				No. 112
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$5,800		$5,800
May-31	Adjusting		$1,500		$7,300
Supplies				No. 126
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$1,700		$1,700
May-31	Adjusting			$700	$1,000
Prepaid Insurance				No. 130
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$2,400		$2,400
May-31	Adjusting			$100	$2,300
Equipments				No. 149
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$10,200		$10,200
Accumulated Depreciation-Equipments				No. 150
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Adjusting			$170	$170
Accounts Payable				No. 201
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance			$4,200	$4,200
May-31	Adjusting			$200	$4,400
Unearned Service Revenue				No. 209
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance			$1,900	$1,900
May-31	Adjusting		$400		$1,500
Salaries & Wages Payable				No. 212
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Adjusting			$1,600	$1,600
Owner's Capital				No. 301
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance			$15,200	$15,200
Service Revenue				No. 400
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance			$7,500	$7,500
May-31	Adjusting			$400	$7,900
May-31	Adjusting			$1,500	$9,400
Supplies Expense				No. 631
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Adjusting		$700		$700
Depreciation Expense				No. 717
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Adjusting		$170		$170
Insurance Expense				No. 722
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Adjusting		$100		$100
Salaries & Wages Expense				No. 726
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$3,300		$3,300
May-31	Adjusting		$1,600		$4,900
Rent Expense				No. 729
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Balance		$1,000		$1,000
Utilities Expense				No. 732
Date	Explanation	Ref	Debit	Credit	Balance
May-31	Adjusting		$200		$200
Adjusted Trial Balance
May 31, 2020
Account Number	Details	Debit	Credit
101	Cash	$4,400
112	Accounts Receivable	$7,300
126	Supplies	$1,000
130	Prepaid Insurance	$2,300
149	Equipments	$10,200
150	Accumulated Depreciation-Equipments		$170
201	Accounts Payable		$4,400
209	Unearned Service Revenue		$1,500
212	Salaries & Wages Payable		$1,600
301	Owner's Capital		$15,200
400	Service Revenue		$9,400
631	Supplies Expense	$700
717	Depreciation Expense	$170
722	Insurance Expense	$100
726	Salaries & Wages Expense	$4,900
729	Rent Expense	$1,000
732	Utilities Expense	$200
	Total	$32,270	$32,270