The unadjusted trial balance of Sketch Star Makers Inc., prepared as of December

Question

The unadjusted trial balance of Sketch Star Makers Inc., prepared as of December 31, 2015, includes the following account balances. All of the accounts listed have normal balances. $ Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Notes Payable (long-term) Unearned Revenue Service Revenue Salaries and Wages Expense 18,000 3,600 4,200 8,000 26,000 3,600 36,000 13,000 46,000 38,000 The following information is also available: A) Account of supplies revealed $2,000 worth on hand at December 31, 2015. B) An insurance policy, purchased on January 1, 2015, covers four years. C) The equipment depreciates at a rate of $2,600 per year; no depreciation has been recorded for 2015. D) Half (or 50%) of the amount recorded as Unearned Revenue remains unearned as of December 31, 2015 E) The accrued amount of salaries and wages at December 31, 2015 are $3,600. Required: Prepare the required adjustments for the company as of December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

A Supplies expense 2200 =4200-2000         Supplies 2200 B Insurance expense 2000 =8000/4         Prepaid Insurance 2000 C Depreciation expense 2600          Accumulated Depreciation––Equipment 2600 D Service Revenue 6500 =13000*50%         Unearned Revenue 6500 E Salaries and Wages Expense 3600          Salaries and Wages Payable 3600

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