Pitman Company Unadjusted Trial Balance October 31, 2019 Debit Balances Credit Balances
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,400 Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,980 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,500 Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,250 Accumulated Depreciation—Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,550
Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,300 Accumulated Depreciation—Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,950 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,150 Unearned Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,750 Jan Pitman, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371,000 Jan Pitman, Drawing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 Fees Earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,600 Salaries and Wages Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193,370 Utilities Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,375 Advertising Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,800 Repairs Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,250 Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,075 900,000 900,000
The data needed to determine year-end adjustments are as follows:
• Unexpired insurance at October 31, $600.
• Supplies on hand at October 31, $675.
• Depreciation of building for the year, $12,000.
• Depreciation of equipment for the year, $8,600.
• Unearned rent at October 31, $2,250.
• Accrued salaries and wages at October 31, $2,800.
• Fees earned but unbilled on October 31, $10,050.
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. a. Insurance Expense6,600 Prepaid Insurance6,600 Insurance expired ($7,200 – $600). b. Supplies Expense1,305 Supplies1,305 Supplies used ($1,980 – $675). c. Depreciation Expense—Building 12,000 Accumulated Depreciation—Building 12,000 Building depreciation. d. Depreciation Expense—Equipment 8,600 Accumulated Depreciation—Equipment 8,600 Equipment depreciation. e. Unearned Rent4,500 Rent Revenue4,500 Rent revenue earned ($6,750 – $2,250). f. Salaries and Wages Expense 2,800 Salaries and Wages Payable2,800 Accrued salaries and wages. g. Accounts Receivable10,050 Fees Earned10,050 Accrued fees earned.
2. Debit Credit Balances Balances Cash7,500 Accounts Receivable48,450 Prepaid Insurance600 Supplies675 Land112,500 Building300,250 Accumulated Depreciation—Building99,550 Equipment135,300 Accumulated Depreciation—Equipment106,550 Accounts Payable12,150 Unearned Rent2,250 Salaries and Wages Payable2,800 Jan Pitman, Capital371,000 Jan Pitman, Drawing15,000 Fees Earned334,650 Rent Revenue4,500 Salaries and Wages Expense196,170 Utilities Expense42,375 Advertising Expense22,800 Repairs Expense17,250 Depreciation Expense—Building 12,000 Depreciation Expense—Equipment8,600 Insurance Expense6,600 Supplies Expense1,305 Miscellaneous Expense6,075 933,450 933,450