Question

Ieder accounts, and prepare an adjusted trial balan P3.LA (LO 2, 3, 4) Logan Krause started her own consulting firm, Krause Consulting, on May 1, 2020. The trial balance at May 31 is as follows. Krause Consulting Trial Balance May 31, 2020 Credit Account Number 101 112 Debit $ 4.500 6,000 1.900 3.00) 11.400 1:49 201 209 301 400 726 729 Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accounts Payable Uncanned Service Revenue Owner's Capital Service Revenue Salaries and Wages Expense Rent Expense $ 4.500 2,000 18,700 9.500 6,400 900 $34,700 $34,700 In addition to those accounts listed on the trial balance, the chart of accounts for Krause 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. $900 of supplies have been used during the month. 2. Utilities expense incurred but not paid on May 31, 2020, $250. 3. The insurance policy is for 2 years. 4. $400 of the balance in the uncarned service revenue account remains uncarned at the end of the month. 5. May 31 is a Wednesday, and employees are paid on Fridays. Krause Consulting has two employees, who are paid $920 each for a 5-day work week. 6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $190 per month for 60 months. 7. Invoices representing $1,700 of services performed during the month have not been recorded as of May 31. Instructions a. Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal. b. Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. c. Prepare an adjusted trial balance at May 31, 2020. |

Answer 1

1. Adjusting Entries -

Date Credit Krause Consulting Adjusting Entries Accounts Title Debit Supplies Expense $ 900 Supplies (Being Supplies utilised in the year) 1 $ 900 2 Utilities Expense $ 250 Utilities Payable (Being Utilities expense accrued) $ 250 3 Insurance Expense $ 150 Prepaid Insurance (Being Insurance Expense incurred) $ 150 4 Unearned Service Revenue $ 1,600 Service Revenue (Being Unearned revenue earned) $ 1,600 5 Salaries and Wages Expense $ 1,104 Salaries and Wages Payable $ 1,104 (Being Salaries Expense incurred) $920 / 5 Days X 2 Employees X 3 Days = $1,104 6 190 Depreciation Expense $ Accumulated Depreciation (Being depreciation incurred) $ 190 7 Accounts Receivable $ 1,700 Service Revenue $ 1,700 (Being Service revenue earned on account)

2. Ledgers -

Cash $ 4,500 Utilities Payable 2 May 31 $ 250 May 31 $ 4,500 May 31 $ 250 Accounts Receivable May 31s $ 6,000 7 $ 1,700 Unearned Service Revenue $ 1,600 May 31 $ 2,000 4 May 31 $ 7,700 May 31 $ 400 Supplies $ 1,900 1 Owner's Capital May 31 May 31 $ 900 $ 18,700 May 31 $ 1,000 May 31 $18,700 Prepaid Insurance $ 3,600 3 May 31 $ 150 Service Revenue May 31 4 7 $12,800 $ 9,500 $ 1,600 $ 1,700 May 31 $ 3,450 May 31 Equipment $ 11,400 May 31 Salaries and Wages Expense May 31 $ 6,400 5 $ 1,104 May 31 $ 11,400 May 31 $ 7,504 Accumulated Depreciation 6 $ Rent Expense 900 190 May 31 $ May 31 $ 190 May 31 $ 900 Accounts Payable Supplies Expense $ 900 May 31 $ 4,500 1 May 31 $ 4,500 May 31$ 900 Salaries and Wages Payable 5 $ 1,104 Utilities Expense $ 250 2 May 31 $ $ 1,104 May 31 $ 250 Depreciation Expense $ 190 Insurance Expense $ 150 6 3 May 31 $ 190 May 31 $ 150

3. Adjusted Trial Balance -

$ Krause Consulting Adjusted Trial Balance May 31, 2020 Cash $ 4,500 Accounts Receivable $ 7,700 Supplies $ 1,000 Prepaid Insurance $ 3,450 Equipment $ 11,400 Accumulated Depreciation Accounts Payable Salaries and Wages Payable Utilities Payable Unearned Service Revenue Owner's Capital Service Revenue Salaries and Wages Expense $ 7,504 Rent Expense $ 900 Supplies Expense $ 900 Utilities Expense $ 250 Insurance Expense $ 150 Depreciation Expense $ 190 $ 190 $ 4,500 $ 1,104 $ 250 $ 400 $ 18,700 $ 12,800 Toal $ 37,944 $ 37,944