On September 30, 2013, after one month of operation, the general ledger of Cross Timbers Company contained the accounts and balances shown below.
INSTRUCTIONS
1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted Trial Balance. Use the data about the firm’s accounts and balances to complete the Trial Balance section.
2. Enter the adjustments described below in the Adjustments section. Identify each adjustment with the appropriate letter. (Some items may not require adjustments.)
3. Complete the Adjusted Trial Balance section.
ACCOUNTS AND BALANCES
Cash | $26,460 Dr. |
Supplies | 740 Dr. |
Prepaid Rent | 4,200 Dr. |
Prepaid Advertising | 3,750 Dr. |
Prepaid Interest | 450 Dr. |
Furniture | 4,840 Dr. |
Accumulated Depreciation—Furniture |
|
Equipment | 9,000 Dr. |
Accumulated Depreciation—Equipment |
|
Notes Payable | 20,250 Cr. |
Accounts Payable | 4,400 Cr. |
Interest Payable |
|
Unearned Course Fees | 22,000 Cr. |
Scott Nelson, Capital | 6,730 Cr. |
Scott Nelson, Drawing | 2,000 Dr. |
Course Fees |
|
Salaries Expense | 1,600 Dr. |
Telephone Expense | 120 Dr. |
Entertainment Expense | 220 Dr. |
Supplies Expense |
|
Rent Expense |
|
Advertising Expense |
|
Depreciation Expense—Furniture |
|
Depreciation Expense—Equipment |
|
Interest Expense |
|
ADJUSTMENTS
a. On September 30, an inventory of the supplies showed that items costing $705 were on hand.
b. On September 1, the firm paid $4,200 in advance for six months of rent.
c. On September 1, the firm signed a six-month advertising contract for $3,750 and paid the full amount in advance.
d. On September 1, the firm paid $450 interest in advance on a three-month note that it issued to the bank.
e. On September 1, the firm purchased office furniture for $4,840. The furniture is expected to have a useful life of five years and a salvage value of $340.
f. On September 3, the firm purchased equipment for $9,000. The equipment is expected to have a useful life of five years and a salvage value of $1,200.
g. On September 1, the firm issued a two-month, 8 percent note for $5,250.
h. During September, the firm received $22,000 fees in advance. An analysis of the firm’s records shows that $7,000 applies to services provided in September and the rest pertains to future months.
Analyze: What was the net dollar effect on income of the adjustments to the accounting records of the business?
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.