Reece Financial Services Co. Unadjusted Trial Balance July 31, 2019 Debit Balances Credit Balances Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,200 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,750 Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,725 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,750 Accumulated Depreciation—Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,850 Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000 Accumulated Depreciation—Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,650 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,750 Unearned Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600 Joni Reece, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,550 Joni Reece, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 Fees Earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158,600 Salaries and Wages Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,850 Utilities Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 Advertising Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500 Repairs Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,100 Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,025 400,000 400,000
The data needed to determine year-end adjustments are as follows:
• Depreciation of building for the year, $6,400.
• Depreciation of equipment for the year, $2,800.
• Accrued salaries and wages at July 31, $900.
• Unexpired insurance at July 31, $1,500.
• Fees earned but unbilled on July 31, $10,200.
• Supplies on hand at July 31, $615.
• Rent unearned at July 31, $300.
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. 2019
July 31 Depreciation Expense—Building 6,400
Accumulated Depreciation—Building 6,400
Building depreciation.
31 Depreciation Expense—Equipment 2,800
Accumulated Depreciation—Equipment 2,800
Equipment depreciation.
31 Salaries and Wages Expense 900
Salaries and Wages Payable900
Accrued salaries and wages.
31 Insurance Expense4,500
Prepaid Insurance4,500
Insurance expired ($6,000 – $1,500).
31 Accounts Receivable10,200
Fees Earned10,200
Accrued fees earned.
31 Supplies Expense1,110
Supplies1,110
Supplies used ($1,725 – $615).
31 Unearned Rent3,300
Rent Revenue3,300
Rent revenue earned ($3,600 – $300).
2.
Debit Credit
Balances Balances
Cash10,200
Accounts Receivable44,950
Prepaid Insurance1,500
Supplies615
Land50,000
Building155,750
Accumulated Depreciation—Building69,250
Equipment45,000
Accumulated Depreciation—Equipment20,450
Accounts Payable3,750
Unearned Rent300
Salaries and Wages Payable900
Joni Reece, Capital153,550
Joni Reece, Drawing8,000
Fees Earned168,800
Rent Revenue3,300
Salaries and Wages Expense57,750
Utilities Expense14,100
Advertising Expense7,500
Depreciation Expense—Building6,400
Repairs Expense6,100
Insurance Expense4,500
Depreciation Expense—Equipment2,800
Supplies Expense1,110
Miscellaneous Expense4,025
420,300 420,300