Journalizing adjusting and closing entries [45-60 min]The unadjusted trial balance and adj...

Journalizing adjusting and closing entries [45-60 min]

The unadjusted trial balance and adjustment data of Elias Real Estate Appraisal Company at June 30, 2012, follow:

Adjustment data at June 30, 2012:

a. Prepaid insurance expired, $300.

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b. Accrued service revenue, $1,300.

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c. Accrued salary expense, $900.

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d. Depreciation for the year, $8,500.

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e. Supplies used during the year, $600.

Requirements

1. Open T-accounts for Retained earnings and all the accounts that follow on the trial balance. Insert their unadjusted balances. Also open a T-account for Income summary, which has a zero balance.

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2. Journalize the adjusting entries and post to the accounts that you opened. Show the balance of each revenue account and each expense account.

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3. Journalize the closing entries and post to the accounts that you opened. Draw double underlines under each account balance that you close to zero.

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4. Compute the ending balance of Retained earnings.