Question

Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2018, the end of the current year, Rowland Company’s accounting clerk prepared the following unadjusted trial balance: Rowland Company UNADJUSTED TRIAL BALANCE August 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 7,710.00 2 Accounts Receivable 37,935.00 3 Prepaid Insurance 7,070.00 4 Supplies 2,125.00 5 Land 108,400.00 6 Building 145,300.00 7 Accumulated Depreciation-Building 85,610.00 8 Equipment 134,800.00 9 Accumulated Depreciation-Equipment 96,100.00 10 Accounts Payable 12,625.00 11 Unearned Rent 6,340.00 12 Common Stock 75,495.00 13 Retained Earnings 144,195.00 14 Dividends 15,120.00 15 Fees Earned 323,700.00 16 Salaries and Wages Expense 196,770.00 17 Utilities Expense 42,265.00 18 Advertising Expense 23,135.00 19 Repairs Expense 17,195.00 20 Miscellaneous Expense 6,240.00 21 Totals 744,065.00 744,065.00 The data needed to determine year-end adjustments are as follows: a. Unexpired insurance at August 31, $6,105. b. Supplies on hand at August 31, $485. c. Depreciation of building for the year, $7,140. d. Depreciation of equipment for the year, $4,445. e. Rent unearned at August 31, $1,890. f. Accrued salaries and wages at August 31, $3,330. g. Fees earned but unbilled on August 31, $11,475. Required: 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. Refer to the Chart of Accounts for exact wording of account titles. 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

Answer 1

1. In the books of Rowland Company:

Adjusting Entries:

Date	General Journal	Debit	Credit
		$	$
a.	Insurance Expense	965
	Prepaid Insurance		965
b.	Supplies Expense	1,640
	Supplies		1,640
c.	Depreciation Expense: Building	7,140
	Accumulated Depreciation : Building		7,140
d.	Depreciation Expense : Equipment	4,445
	Accumulated Depreciation : Equipment		4,445
e.	Unearned Rent	4,450
	Rent Revenue		4,450
f.	Salaries and Wages Expense	3,330
	Salaries and Wages Payable		3,330
g.	Accounts Receivable	11,475
	Fees Earned		11,475

2.

Rowland Company Adjusted Trial Balance August 31, 2018
Account Titles	Debit	Credit
	$	$
Cash	7,710
Accounts Receivable	49,410
Prepaid Insurance	6,105
Supplies	485
Land	108,400
Building	145,300
Accumulated Depreciation : Building		92,750
Equipment	134,800
Accumulated Depreciation : Equipment		100,545
Accounts Payable		12,625
Unearned Rent		1,890
Salaries and Wages Payable		3,330
Common Stock		75,495
Retained Earnings		144,195
Dividends	15,120
Fees Earned		335,175
Rent Revenue		4,450
Salaries and Wages Expense	200,100
Utilities Expense	42,265
Advertising Expense	23,135
Repairs Expense	17,195
Depreciation Expense: Building	7,140
Depreciation Expense: Equipment	4,445
Insurance Expense	965
Supplies Expense	1,640
Miscellaneous Expense	6,240
Totals	$ 770,455	$ 770,455