Logan Krause started her own consulting firm, Krause Consulting, on May 1, 2017.

Question

Logan Krause started her own consulting firm, Krause Consulting, on May 1, 2017. The trial balance at May 31 is as follows.

KRAUSE CONSULTING
Trial Balance
May 31, 2017

In addition to those accounts listed on the trial balance, the chart of accounts for Krause Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 717 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense.

Other data:

Invoices representing $1,500 of services performed during the month have not been recorded as of May 31.

Prepare the adjusting entries for the month of May. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Date

Account Titles and Explanation

Ref.

Debit

Credit

KRAUSE CONSULTING
Trial Balance
May 31, 2017

Account Number Debit Credit 101 Cash $ 4,700 112 Accounts Receivable 6,100 126 Supplies 1,700 130 Prepaid Insurance 2,400 149 Equipment 12,000 201 Accounts Payable $ 4,800 209 Unearned Service Revenue 2,000 301 Owner’s Capital 16,300 400 Service Revenue 8,500 726 Salaries and Wages Expense 3,300 729 Rent Expense 1,400 $31,600 $31,600

Explanation / Answer

Adjusting Journal Entry for the Month of MAy Date Account Title Ref Debit Credit May31 Supplies Expense 631 $700 To Supplies 126 $700 To record Supplies Expense May31 Utilities Expense 732 $300 Account Payable 201 $300 To record Utilities Expense May31 Insurance Expense 722 $100 Prepaid Insurance 130 $100 To Record Insurance Expense May31 Unearned Service Revenue 209 $1,700 Service Revenue 400 $1,700 To record the trf of Revenue from Unearned revenue ($2000-$300) May31 Salaries & Wages Expense 726 $1,080 Salaries & Wages Payable 212 $1,080 To Record Salries Expense and payable ( ($900*2)/5*3 May31 Depreciation Expense 717 $200 Accumulated Depreciation on Equipment 150 $200 To record Depreciation Expense May31 Account Receivable 112 $1,500 Service Revenue 400 $1,500 To record revenue and Account Receivable

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