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$250 of the Unearned serv. Rev. account balance has now been earned b. A year-en

ID: 2461135 • Letter: #

Question

$250 of the Unearned serv. Rev. account balance has now been earned b. A year-end inventory reveals there is now 650 supplies on hand c. The office we rent has been in use all 12 months this past year and the monthly rental rate has been 525 per month for many years. d. The equipment is estimated to last 5 years. All the equipment was bought a few years ago. e. At year end we owe our employees $625 in accrued compensation; f $1, 200 of revenue has been earned but not yet recorded nor collected. g. Our current insurance policy will expire after 6 months into next year. Insurance Costs us 75 per month.

Explanation / Answer

Complete the worksheet for financial statements:

Trail balance

Adjustments

Adjusted trial balance

Inc. Statement

Balance sheet

Debit

Credit

Adj. ref.

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Cash

$    11,500

$    11,500

$    11,500

Accounts receivable

$    16,300

f

$    1,200

$    17,500

$    17,500

Supplies

$          750

b

$        100

$          650

$          650

Prepaid insurance

$          975

g

$        450

$          525

$          525

Prepaid rent

$      7,350

c

$    6,300

$      1,050

$      1,050

Equipment

$    42,000

$    42,000

$    42,000

Accum. Depreciation, Equip.

$    16,200

d

$    5,160

$    21,360

$    21,360

Accounts payable

$      8,525

$      8,525

$      8,525

Salary payable

e

$        625

$          625

$          625

Unearned service revenue

$          865

a

$        250

$          615

$          615

Betty, Jones, Capital

$    48,250

$    48,250

$    48,250

Betty, Jones, withdrawals

$    35,201

$    35,201

$    35,201

Service revenue

$    97,480

a, f

$    1,450

$    98,930

$ 98,930

Depreciation expense

d

$    5,160

$      5,160

$    5,160

Supplies Exp

b

$        100

$          100

$        100

Salary Expenses

$    52,444

e

$        625

$    53,069

$ 53,069

Utilities Exp

$      4,800

$      4,800

$    4,800

Insurance Exp

g

$        450

$          450

$        450

Rent exp

c

$    6,300

$      6,300

$    6,300

Totals

$ 171,320

$ 171,320

$ 14,085

$ 14,085

$ 178,305

$ 178,305

$ 69,879

$ 98,930

$ 108,426

$    79,375

Profit/ Loss

$ 29,051

$    29,051

Totals

$ 98,930

$ 98,930

$ 108,426

$ 108,426

Trail balance

Adjustments

Adjusted trial balance

Inc. Statement

Balance sheet

Debit

Credit

Adj. ref.

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Cash

$    11,500

$    11,500

$    11,500

Accounts receivable

$    16,300

f

$    1,200

$    17,500

$    17,500

Supplies

$          750

b

$        100

$          650

$          650

Prepaid insurance

$          975

g

$        450

$          525

$          525

Prepaid rent

$      7,350

c

$    6,300

$      1,050

$      1,050

Equipment

$    42,000

$    42,000

$    42,000

Accum. Depreciation, Equip.

$    16,200

d

$    5,160

$    21,360

$    21,360

Accounts payable

$      8,525

$      8,525

$      8,525

Salary payable

e

$        625

$          625

$          625

Unearned service revenue

$          865

a

$        250

$          615

$          615

Betty, Jones, Capital

$    48,250

$    48,250

$    48,250

Betty, Jones, withdrawals

$    35,201

$    35,201

$    35,201

Service revenue

$    97,480

a, f

$    1,450

$    98,930

$ 98,930

Depreciation expense

d

$    5,160

$      5,160

$    5,160

Supplies Exp

b

$        100

$          100

$        100

Salary Expenses

$    52,444

e

$        625

$    53,069

$ 53,069

Utilities Exp

$      4,800

$      4,800

$    4,800

Insurance Exp

g

$        450

$          450

$        450

Rent exp

c

$    6,300

$      6,300

$    6,300

Totals

$ 171,320

$ 171,320

$ 14,085

$ 14,085

$ 178,305

$ 178,305

$ 69,879

$ 98,930

$ 108,426

$    79,375

Profit/ Loss

$ 29,051

$    29,051

Totals

$ 98,930

$ 98,930

$ 108,426

$ 108,426