Question

Chapter 3 The Adjusting Process147 Obj. 2, 3, 4, 5,6 and operated by Deloris PR 3-5A Adjusting entries and adjusted trial balances ebitSears Editing Company is a small editorial services company ow 900 sears. On January 31, 20Y1, the end of the current year, Sears Editing Company's accounting clerk prepared the following unadjusted trial balance: Sears Editing Company Unadjusted Trial Balance January 31, 20Y1 Credit Balances Debit Balances 7,500 ...38,400 7,200 1,980 112,500 150,250 Cash Prepaid Insurance Supplies.. Land Building Accumulated Depreciation-Building Equipment. 87,550 .. 135,300 97,950 12,150 6,750 75,000 146,000 Accounts Payable Common Stock Retained Earnings . .. Dividends Fees Earned Salaries and Wages Expense... Utilities Expense Advertising Expense... 324,600 193,370 42,375 17,250 6,075 750,000 Miscellaneous Expense 750,000 The data needed to determine year-end adjustments are as follows: .Unexpired insurance at January 31, $2,400. Supplies on hand at January 31, $250. Depreciation of building for the year, $6,600. .Depreciation of equipment for the year, $3,500. Rent unearned at January 31, $2,750. Accrued salaries and wages at January 31, $1,800. Fees earned but unbilled on January 31, $15,000 . Instructions 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. 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

Answer 1

Ans-Journalizing the adjusting entries:-

	Date	Account Title	Debit	Credit
A)-	Dec.31	Insurance Expense	$4,800
		Prepaid Insurance		$4,800
		($7,200-$2,400)
B)-	Dec.31	Supplies Expense	$1,730
		Supplies		$1,730
		($1,980-$250)
C)-	Dec.31	Depreciation Expense- Building	$6,600
		Accumulated Depreciation - Building		$6,600
D)-	Dec.31	Depreciation Expense- Equipment	$3,500
		Accumulated Depreciation- Equipment		$3,500
E)-	Dec.31	Unearned Rent	$4,000
		Rent Revenue		$4,000
		($6,750-$2,750)
F)-	Dec.31	Salaries and Wages Expense	$1,800
		Salaries and Wages Payable		$1,800
G)-	Dec.31	Accounts Receivable	$15,000
		Fees Earned		$15,000

2- Adjusted Trial Balance

S.No.	Account Title	Debit	Credit
1	Cash	$7,500
2	Accounts Receivable ($38,400+$15,000)	$53,400
3	Prepaid Insurance ($7,200-$2,400)	$4,800
4	Supplies ($1,980-$1,730)	$250
5	Land	$112,500
6	Building	$150,250
7	Accumulated Depreciation- Building ($87,550+$6,600)		$94,150
8	Equipment	$135,300
9	Accumulated Depreciation - Equipment ($97,950+$3,500)		$101,450
10	Accounts Payable		$12,150
11	Unearned Rent ($6,750-$4,000)		$2,750
12	Salaries and Wages Payable		$1,800
13	Common Stock		$75,000
14	Retained Earnings		$146,000
15	Dividends	$15,000
16	Fees Earned ($324,600+$15,000)		$339,600
17	Rent Revenue		$4,000
18	Salaries and Wages Expenses	$195,170
19	Utilities Expenses	$42,375
20	Advertising Expenses	$22,800
21	Repairs Expenses	$17,250
22	Depreciation Expense-Building	$6,600
23	Depreciation Expense- Equipment	$3,500
24	Insurance Expense	$2,400
25	Supplies Expenses ($1,980-$250)	$1,730
26	Miscellaneous Expenses	$6,075
	Totals	$776,900	$776,900

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