Question

Make trial balance , adjustments and adjusted trial balance

The Accounting Cycle: Nov. 1: Luis Ruiz invests $20,000 to start his own consulting agency Nov. 1: Purchased a one-year fire insurance policy, $960. Nov. S: Acquired a computer for $10,000, paying $3,500 down with balance due in 60 days. Nov. 6: Purchased office supplies on account from Taylor Supply, $1,500. Nov.9: Paid Taylor Supply $400 on account. Nov. 10: Billed Barkley Insurance for consulting services performed, $6,000, Nov. 12: Collected $1,500 from Barkley Insurance. Nov. 12: Hired secretary to be paid $600 per week Nov. 15: Collected $1,000 from Bryant Realty for consulting services to be performed. Nov. 26: Paid the secretary two weeks' wages, $1,200 Nov. 29: Received and paid the November utility bill, $700. Nov. 30: Recelved (but did not pay) the November telephone bill, $100. ov. 30: Performed consulting services for Bing Enterprises, $4,800, to be collected in December. 30: Ruiz withdrew $1,400 from the business for personal living expenses

Answer 1

Solution:

Luis Ruiz

1. Trial Balance:

Trial Balance
for the month ended November 30
Account Titles	Debit	Credit
Cash	$14,340
Accounts Receivable	$9,300
Prepaid Insurance	$960
Supplies	$1,500
Computer	$10,000
Salaries Expense	$1,200
Utility Expense	$700
Capital Withdrawals	$1,400
Accounts Payable		$7,600
Service Revenue		$10,800
Unearned Service Revenue		$1,000
Capital		$20,000
Totals	$39,400	$39,400

Workings –

Debit		Accounts Receivable			Credit
Date	Description	Amount	Date	Description	Amount
10-Nov	Service Revenue	$6,000	12-Nov	Cash	$1,500
30-Nov	Service Revenue	$4,800	30-Nov	Ending Balance (Balancing figure)	$9,300
	Total	$10,800		Total	$10,800
Debit		Prepaid Insurance			Credit
Date	Description	Amount	Date	Description	Amount
1-Nov	Cash	$960	30-Nov	Insurance Expense	$80
			30-Nov	Ending Balance	$880
	Total	$960		Total	$960
Debit		Accounts Payable			Credit
Date	Description	Amount	Date	Description	Amount
9-Nov	Cash	$400	5-Nov	Computer	$6,500
			6-Nov	Supplies	$1,500
30-Nov	Ending Balance	$7,600
	Total	$8,000		Total	$8,000

1. Adjustment Entries –

Date	Account Titles and Explanation	Ref. No.	Debit	Credit
30-Nov	Insurance Expense		$80
	Prepaid Insurance			$80
	(To record insurance expense for Nov. month - $960 x 1/12 = $80)
30-Nov	Telephone Bill Expense		$100
	Telephone Bill Payable			$100
	(To record telephone bill received but not paid)

Adjusting entries are needed for Supplies Expense (Cost of supplies used during the period), Depreciation expense - Computer and the earned portion of unearned service revenue. However, since no information related to the above three events has been provided in the question, no adjustment entry can be made for these events.

1. Adjusted Trial Balance

Adjusted Trial Balance
as of November 30
Account Titles	Debit	Credit
Cash	$14,340
Accounts Receivable	$9,300
Prepaid Insurance	$880
Supplies	$1,500
Computer	$10,000
Salaries Expense	$1,200
Utility Expense	$700
Telephone Bill Expense	$100
Insurance Expense	$80
Capital Withdrawals	$1,400
Accounts Payable		$7,600
Service Revenue		$10,800
Telephone bill payable		$100
Unearned Service Revenue		$1,000
Capital		$20,000
Totals	$39,500	$39,500