Question

CI The trial balance of Star Company at December 31, 2019 is shown below. [SK2: 10 marks Section C (20 Marks) Star Company Trial Balance December 31, 2019 Credit Debit Accounts 25,000 Cash Prepaid Insurance 55,000 Supplies 27.500 Equipment 600,000 Accumulated 112,500 Depreciation - Equipment Notes Payable 100,000 Accounts Payable 60,000 Star Capital 382,500 Star Drawings 60,000 Service Revenue 122,500 Utilities Expense 10,000 Total 777,500 777,500 Other information: 1. Rent owed for the month of December but will not be paid until January, 2020 was $15,000. 2. A physical count of supplies indicates $7,500 on hand at December 31 3. Depreciation of equipment for December was 4. The amount of insurance that expired in the month of December was 5. Salaries owed for the month of December but will not be paid until January, 2020 was $20,000. $10,000. $5,000. Required: Prepare the adjusting entries required b. Prepare the adjusted trial balance on December 31, 2019. (5 marks) a. on December 31, 2019. (5 marks)

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Part a					Part b
						Unadjusted		Adjustments		Adjusted
Event	Account	Debit	Credit		Account	Debit	Credit	Debit	Credit	Debit	Credit
1	Rent Expense	$ 15,000			Cash	$           25,000				$           25,000
	Accounts Payable		$ 15,000		Prepaid Insurance	$           55,000			$             5,000	$           50,000
	(To record rent expense)				Supplies	$           27,500			$           20,000	$             7,500
					Equipment	$         600,000				$         600,000
2	Supplies Expense	$ 20,000			Accumulated Depreciation		$         112,500		$           10,000		$         122,500
	Supplies		$ 20,000		Notes Payable		$         100,000				$         100,000
	(To record supplies expense) $27,500-$7,500				Accounts Payable		$           60,000		$           15,000		$           75,000
					Salaries Payable				$           20,000		$           20,000
3	Depreciation Expense	$ 10,000			Star Capital		$         382,500				$         382,500
	Accumulated Depreciation		$ 10,000		Star Drawing	$           60,000				$           60,000
	(To record depreciation expense)				Service Revenue		$         122,500				$         122,500
					Utilities Expense	$           10,000				$           10,000
4	Insurance Expense	$    5,000			Rent Expense			$           15,000		$           15,000
	Prepaid Insurance		$    5,000		Supplies Expense			$           20,000		$           20,000
	(To record insurance expense)				Depreication Expense			$           10,000		$           10,000
					Insurance Expense			$             5,000		$             5,000
5	Salaries Expense	$ 20,000			Salaries Expense			$           20,000		$           20,000
	Salaries Payable		$ 20,000
	(To record salaries expense)				Total	$         777,500	$         777,500	$           70,000	$           70,000	$         822,500	$         822,500