Cambridge Company is a small editorial services company owned and operated by Da

Question

Cambridge Company is a small editorial services company owned and operated by Dave Maier. On December 31, 2008, the end of the current year Cambridge Company's accounting clerk prepared the unadjusted trial balance shown at the top of the following page. The data needed to determine year end adjustments are as follows: a. Unexpired insurance at December 31, $2,700 b. Supplies on hand at December 31, $480 c. Depreciation of building for the year, $1,600 d. Depreciation of equipment for the year, $4,400. e. Rent unearned at December 31, $3,250 f. Accrued salaries and wages at December 31, $2,800 g. Fees earned but unbilled on December 31, $6,200. Instructions 1. Journalize the adjusting entries. Add additional accounts as needed 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance Cambridge Company Unadjusted Trial Balance December 31, 2008 Cash Accounts Receivable Prepaid Insurance Supplies Land Debit Credit Balances Balances 5,550 28,350 7,200 1,980 112,500

Explanation / Answer

1) Adjusting Entries a) Insurance Expense Dr 4500              Prepaid Insurance Cr 4500 ( To record insurance expense 7200 - 2700) b) Supplies Expense Dr 1500              Supplies Cr 1500 ( To record supplies expenses) c) Depriciation - Building Dr 1600               Accumulated Depriciation - Building Cr 1600 ( To record depriciation of building) d) Depriciation - Equipment Dr 4400               Accumulated Depriciation - Equipment Cr 4400 ( To record depriciation of Equipment) e) Unearned Rent Dr 3500              Rental Income Cr 3500 ( To record rental income) f) Salaries and Wages Expense Dr 2800             Accrued Salaries and Wages Cr 2800 ( To record salaries and wages expense) g) Unbilled Revenue Dr 6200               Fees Earned Cr 6200 ( To record fees earned but unbilled) 2) Adjusted Trial Balance Unadjusted Trial Balance          Adjustments Adjusted Trial Balance Debit Credit Debit Credit Debit Credit Cash 5550 5550 Accounts Receivable 28350 28350 Unbilled Revenue 6200 6200 Prepaid Insurance 7200 4500 2700 Supplies 1980 1500 480 Land 112500 112500 Building 212250 212250 Accumulated Depriciation - Building 137550 1600 139150 Equipment 135300 135300 Accumulated Depriciation - Equipment 97950 4400 102350 Accounts Payable 12150 12150 Accrued Salaries and Wages 2800 2800 Unearned Rent 6750 3500 3250 Dave Maier, Capital 201000 201000 Dave Maier, Drawing 15000 15000 Fees Earned 294600 6200 300800 Rental Income 3500 3500 Salaries and Wages Expense 143370 2800 146170 Utilities Expense 42375 42375 Advertising Expense 22800 22800 Repair Expense 17250 17250 Depriciation - Building 1600 1600 Depriciation - Equipment 4400 4400 Suppliexpenses e 1500 1500 Insurance Expense 4500 4500 Miscellaneous Expense 6075 6075 750000 750000 24500 24500 765000 765000

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