Review the unadjusted trial balance below and prepare adjusting journal entries
ID: 2493529 • Letter: R
Question
Review the unadjusted trial balance below and prepare adjusting journal entries to record the various described items below. Record in the space provided at the bottom of this spreadsheet. After completing journal entries, complete the adjusted trial balance below. Lastly complete the income statement, balance sheet and statement of retained earnings. The balance sheet must balance. The accounting equation is Assets = Liabilities + Equity. Baltimore Corporation Unadjusted Trial Balance January 31, 2016 Debits Credits Cash $ 37,500 $ - Accounts receivable 12,410 - Prepaid insurance 2,400 - Supplies inventory 7,113 - Equipment 35,000 - Accumulated depreciation - 10,000 Accounts payable - 7,569 Salaries payable - - Interest payable - - Unearned revenue - 8,500 Loan payable - 11,500 Capital stock - 25,000 Retained earnings, Jan. 1 - 15,457 Revenues - 43,995 Depreciation expense - - Interest expense - - Insurance expense - - Office expense 2,500 - Rent expense 13,000 - Salary expense 12,098 - Supplies expense - - Utilities expense - - $ 122,021 $ 122,021 1 Belair Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used.As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life.
2 As of the end of the month, Belair Corporation has provided services to customers for which the earnings process is complete.
Formal billings are normally sent out on the first day of each month for the prior month's work. January's unbilled work is $25,000.
3 Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,500.
4 A review of supplies on hand at the end of the month revealed items costing $3,500.
5 The $2,400 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.
6 The unearned revenue was collected in December of 2014. 60% of that amount was actually earned in January, with the remainder to be earned in February.
7 The loan accrues interest at 1% per month. No interest was paid in January.
8 At month end, salaries of $2,120 have been earned but not paid. JE # ACCOUNT DEBIT CREDIT 1 2 3 4 5 6 7 8 Baltimore Corporation Adjusted Trial Balance January 31, 2016 Debits Credits Cash Accounts receivable Prepaid insurance Supplies inventory Equipment Accumulated depreciation Accounts payable Salaries payable Interest payable Unearned revenue Loan payable Capital stock Retained earnings, Jan. 1 Revenues Depreciation expense Insurance expense Interest expense Office expense Rent expense Salary expense Supplies expense Utilities expense $ - $ - Baltimore Corporation Income Statement For the month ended January 31, 2016 Baltimore Corporation Balance Sheet January 31, 2016 Baltimore Corporation Statement of Retained Earnings As of January 31, 2015 Review the unadjusted trial balance below and prepare adjusting journal entries to record the various described items below. Record in the space provided at the bottom of this spreadsheet. After completing journal entries, complete the adjusted trial balance below. Lastly complete the income statement, balance sheet and statement of retained earnings. The balance sheet must balance. The accounting equation is Assets = Liabilities + Equity. Baltimore Corporation Unadjusted Trial Balance January 31, 2016 Debits Credits Cash $ 37,500 $ - Accounts receivable 12,410 - Prepaid insurance 2,400 - Supplies inventory 7,113 - Equipment 35,000 - Accumulated depreciation - 10,000 Accounts payable - 7,569 Salaries payable - - Interest payable - - Unearned revenue - 8,500 Loan payable - 11,500 Capital stock - 25,000 Retained earnings, Jan. 1 - 15,457 Revenues - 43,995 Depreciation expense - - Interest expense - - Insurance expense - - Office expense 2,500 - Rent expense 13,000 - Salary expense 12,098 - Supplies expense - - Utilities expense - - $ 122,021 $ 122,021 1 Belair Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used.
As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life.
2 As of the end of the month, Belair Corporation has provided services to customers for which the earnings process is complete.
Formal billings are normally sent out on the first day of each month for the prior month's work. January's unbilled work is $25,000.
3 Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,500.
4 A review of supplies on hand at the end of the month revealed items costing $3,500.
5 The $2,400 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.
6 The unearned revenue was collected in December of 2014. 60% of that amount was actually earned in January, with the remainder to be earned in February.
7 The loan accrues interest at 1% per month. No interest was paid in January.
8 At month end, salaries of $2,120 have been earned but not paid. JE # ACCOUNT DEBIT CREDIT 1 2 3 4 5 6 7 8 Baltimore Corporation Adjusted Trial Balance January 31, 2016 Debits Credits Cash Accounts receivable Prepaid insurance Supplies inventory Equipment Accumulated depreciation Accounts payable Salaries payable Interest payable Unearned revenue Loan payable Capital stock Retained earnings, Jan. 1 Revenues Depreciation expense Insurance expense Interest expense Office expense Rent expense Salary expense Supplies expense Utilities expense $ - $ - Baltimore Corporation Income Statement For the month ended January 31, 2016 Baltimore Corporation Balance Sheet January 31, 2016 Baltimore Corporation Statement of Retained Earnings As of January 31, 2015
Explanation / Answer
JE # ACCOUNT DEBIT CREDIT 1 Depreciation expense 250 TO Accumulated depreciation 250 2 Cash 25000 To Unearned revenue 25000 3 Utilities expense 1500 To Accounts payable 1500 4 Supplies expense 3613 To Supplies inventory 3613 5 Insurance expense 400 To Prepaid insurance 400 6 Unearned revenue 5100 To Revenues 5100 7 Interest expense 115 To Interest payable 115 8 Salary expense 2120 To Salaries payable 2120 Baltimore Corporation Adjusted Trial Balance 31-Jan-16 Debits Credits Cash 62500 0 Accounts receivable 12410 0 Prepaid insurance 2000 0 Supplies inventory 3500 0 Equipment 35000 0 Accumulated depreciation 0 10250 Accounts payable 0 9069 Salaries payable 0 2120 Interest payable 0 115 Unearned revenue 0 28400 Loan payable 0 11500 Capital stock 0 25000 Retained earnings, Jan. 1 0 15457 Revenues 0 49095 Depreciation expense 250 0 Insurance expense 400 0 Interest expense 115 0 Office expense 2500 0 Rent expense 13000 0 Salary expense 14218 0 Supplies expense 3613 0 Utilities expense 1500 0 151006 151006 Baltimore Corporation Income Statement For the month ended January 31, 2016 (in $) Revenue & gains Revenues 0 49095 Total Revenue & gains 49095 Expenses & Losses Depreciation expense 250 Insurance expense 400 Interest expense 115 Office expense 2500 Rent expense 13000 Salary expense 14218 Supplies expense 3613 Utilities expense 1500 total Expenses & Losses 35596 Net Income ($) 13499 Baltimore Corporation Balance Sheet 31-Jan-16 Assests Current assets Liabiliies Cash 62500 Accumulated depreciation 10250 Accounts receivable 12410 Accounts payable 9069 Prepaid insurance 2000 Salaries payable 2120 Supplies inventory 3500 Interest payable 115 Unearned revenue 28400 Property , plant & equpiment Long term liabilties Equipment 35000 Loan payable 11500 Stockholders Equity Capital stock 25000 Retainedearnings, Jan. 30 28956 Total assets 115410 Total Liabilties & stakeholders equity 115410 Baltimore Corporation Statement of Retained Earnings As of January 31, 2015 As of January 1, 2015 15457 for the month of Jan 13499 As of January 31, 2015 28956
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