Question

Adjusting Entries Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations: Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 2019 Debit Balances Credit Balances Cash 11,400 Accounts Receivable 72,600 Supplies 7,200 Equipment 112,000 Accounts Payable 12,200 Unearned Fees 19,200 137,800 John Bridger, Capital John Bridger, Drawing 10,000 Fees Earned 305,800 Wages Expense Rent Expense Utilities Expense 157,800 55,000 42,000 7,000 Miscellaneous Expense 475,000 475,000 For preparing the adjusting entries, the following data were assembled: • Supplies on hand on April 30 were $1,380. Fees earned but unbilled on April 30 were $3,900. Depreciation of equipment was estimated to be $3,000 for the year. • Unpaid wages accrued on April 30 were $2,475. The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $14,140 of the services was provided between April 1 and April 30.

Answer 1

Requirement 1:

Date	Account title and explanation	Debit	Credit
Apr 30	Supplies expense [7200-1380]	$5,820
	Supplies		$5,820
	[To record supplies used]
Apr 30	Accounts receivable	$3,900
	Fees Earned		$3,900
	[To record accrued revenue]
Apr 30	Depreciation expense	$3,000
	Accumulated depreciation		$3,000
	[To record depreciation expense]
Apr 30	Wage expense	$2,475
	Wages payable		$2,475
	[To record accrued wages]
Apr 30	Unearned fees	$14,140
	Fees earned		$14,140
	[To record revenue from unearned]

Requirement 2:

Revenues	$305,800
Expenses	$261,800
Net income	$44,000

Calculations:

Revenues:
Fees Earned	$305,800
Expenses:
Wages expense	$157,800
Rent expense	$55,000
Utilities expense	$42,000
Miscellaneous expense	$7,000
Total expenses	$261,800

Requirement 3:

Revenues	$323,840
Expenses	$264,275
Net income	$59,565

Calculations:

Revenues:
Fees Earned [305800+3900 accrued+14140 earned]	$323,840
Expenses:
Wages expense [157800+2475 accrued]	$160,275
Rent expense	$55,000
Utilities expense	$42,000
Miscellaneous expense	$7,000
Supplies expense	$5,820
Depreciation expense	$3,000
Total expenses	$264,275

Requirement 4:

John Bridger, capital increased by $49,565

Calculations:

Net income	$59,565
Drawings	($10,000)
John Bridger, capital increased by	$49,565