Wysocki Wheels began operations on March 1 to provide automotive wheel alignment
ID: 2426960 • Letter: W
Question
Wysocki Wheels began operations on March 1 to provide automotive wheel alignment and balancing services. On March 31 the unadjusted trial balance follows.
The following information is also available.
1. The balance in Prepaid Rent was the amount paid on March 1 to cover the rst six months’ rent.
2. Supplies available on March 31 amounted to $1,360.
3. Equipment has an estimated life of nine years (or 108 months).
4. Unpaid and unrecorded wages at March 31 were $1,560.
5. Utility services used during March were estimated at $390; a bill is expected early in April.
6. The balance in Unearned Service Revenue was the amount received on March 1 from a car dealer to cover alignment and balancing services on cars sold by the dealer in March and April. Wysocki Wheels agreed to provide the services at a xed fee of $500 each month.
Required
a. Prepare its accounting adjustments at March 31 in journal entry form.
b. Set up T-accounts and post the accounting adjustments to them.
c. Prepare its income statement for March and its balance sheet at March 31.
d. Prepare entries to close its temporary accounts in journal entry form. Post the closing entries to the T-accounts.
Explanation / Answer
T accounts
31-Mar Rent expenses $ 795 Prepaid rent $ 795 To record rent expensed for one month 4770 / 6 31-Mar Supplies expense $2,340 Supplies $2,340 To record the supplies expenses = 3700 - 1360 31-Mar Depreciation expenses $ 335 Accumulated depreciation $ 335 To record depreciation expenses = 36180 / 108 31-Mar Wages expenses $1,560 Wages Payable $1,560 To record the Unpaid and unrecorded wages 31-Mar Utilities expenses $ 390 Utilities Payable $ 390 To record the Utility services used 31-Mar Unearned service revenue $ 500 Service revenue $ 500 To record the earned service revenueRelated Questions
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