There is no standard template to use. Use excel. Preparing Accounting Adjustment

Question

There is no standard template to use. Use excel.

Preparing Accounting Adjustments Pownall Photomake Company, a commercial photography studio, completed its first year of operations on December 31. Account balances before year-end adjustments follow; no adjustments have been made to the accounts at any time during the year. Assume that all balances are normal $ 4,060 2,600 24,000 34,480 11,000 3,420 Cash An analysis of the firm's records discloses the following (business began on January 1). 1. Photography services of $1,850 have been rendered, but customers have not yet paid or been billed. 2. The company uses the fees receivable account to reflect amounts due but not yet billed Equipment, purchased January 1, has an estimated life of 10 years Utilities expense for December is estimated to be $400, but the bill will not arrive or be paid until January of next year. (All prior months' utilities bills have been received and paid.) The balance in prepaid rent represents the amount paid on January 1 for a two-year lease on the studio it operates from In November, customers paid $2,600 cash in advance for photos to be taken for the holiday season. When received, these fees were credited to unearned photography fees. By December 31, all of these fees are earned. A three-year insurance premium paid on January 1 was debited to prepaid insurance. Supplies still available at December 31 are $1,020. At December 31, wages expense of $375 had been incurred but not yet paid or recorded. 3· 4. 5. 6. 7. 8. Required Prepare the required adjusting entries using the financial statement effects template

Explanation / Answer

Adjusting entries 1 Accounts receivable 1850                            Photography fees earned 1850 2 Depreciation expense 2280 (22800*1/10)                     Accumulated depreciation - equipment 2280 3 Utilities expense 400                Accounts payable 400 4 Rent expense 6300 (12600*1/2)               Prepaid rent 6300 5 Unearned photography fees 2600                            Photography fees earned 2600 6 Insurance expense 990 (2970/3)                 Prepaid insurance 990 7 Supplies expense 3230 (4250-1020)                 Supplies 3230 8 Wages expense 375                Wages payable 375

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