Homework SourseReece Financial Services Co which specializes in appliance r
Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services Co.’s accounting clerk prepared the following unadjusted trial balance at July 31, 2016:
Reece Financial Services Co.
UNADJUSTED TRIAL BALANCE
July 31, 2016
1
Cash
10,200.00
2
Accounts Receivable
34,750.00
3
Prepaid Insurance
6,000.00
4
Supplies
1,725.00
5
Land
50,000.00
6
Building
155,750.00
7
Accumulated Depreciation-Building
62,850.00
8
Equipment
45,000.00
9
Accumulated Depreciation-Equipment
17,650.00
10
Accounts Payable
3,750.00
11
Unearned Rent
3,600.00
12
Joni Reece, Capital
153,550.00
13
Joni Reece, Drawing
8,000.00
14
Fees Earned
158,600.00
15
Salaries and Wages Expense
56,850.00
16
Utilities Expense
14,100.00
17
Advertising Expense
7,500.00
18
Repairs Expense
6,100.00
19
Miscellaneous Expense
4,025.00
20
Totals
400,000.00
400,000.00
The data needed to determine year-end adjustments are as follows:
Chart of Accounts
Journal
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense-Building; Depreciation Expense-Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Adjusted Trial Balance
2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.
Reece Financial Services Co.
ADJUSTED TRIAL BALANCE
July 31, 2016
1
Cash
2
Accounts Receivable
3
Prepaid Insurance
4
Supplies
5
Land
6
Building
7
Accumulated Depreciation-Building
8
Equipment
9
Accumulated Depreciation-Equipment
10
Accounts Payable
11
Unearned Rent
12
Salaries and Wages Payable
13
Joni Reece, Capital
14
Joni Reece, Drawing
15
Fees Earned
16
Rent Revenue
17
Salaries and Wages Expense
18
Utilities Expense
19
Advertising Expense
20
Depreciation Expense-Building
21
Repairs Expense
22
Insurance Expense
23
Depreciation Expense-Equipment
24
Supplies Expense
25
Miscellaneous Expense
26
Totals
| ACCOUNT TITLE | DEBIT | CREDIT | |
|---|---|---|---|
| 1 | Cash | 10,200.00 | |
| 2 | Accounts Receivable | 34,750.00 | |
| 3 | Prepaid Insurance | 6,000.00 | |
| 4 | Supplies | 1,725.00 | |
| 5 | Land | 50,000.00 | |
| 6 | Building | 155,750.00 | |
| 7 | Accumulated Depreciation-Building | 62,850.00 | |
| 8 | Equipment | 45,000.00 | |
| 9 | Accumulated Depreciation-Equipment | 17,650.00 | |
| 10 | Accounts Payable | 3,750.00 | |
| 11 | Unearned Rent | 3,600.00 | |
| 12 | Joni Reece, Capital | 153,550.00 | |
| 13 | Joni Reece, Drawing | 8,000.00 | |
| 14 | Fees Earned | 158,600.00 | |
| 15 | Salaries and Wages Expense | 56,850.00 | |
| 16 | Utilities Expense | 14,100.00 | |
| 17 | Advertising Expense | 7,500.00 | |
| 18 | Repairs Expense | 6,100.00 | |
| 19 | Miscellaneous Expense | 4,025.00 | |
| 20 | Totals | 400,000.00 | 400,000.00 |
Solution
1.
2.
| Date | Description | Post. Ref. | Debit | Credit | |
| 1 | Jul-31 | Adjusting Entries | |||
| 2 | a. | Depreciation expense-building | 6400 | ||
| 3 | Accumulated depreciation-building | 6400 | |||
| 4 | b. | Depreciation expense-equipment | 2800 | ||
| 5 | Accumulated depreciation-equipment | 2800 | |||
| 6 | c. | Salaries and wages expense | 900 | ||
| 7 | Salaries and wages payable | 900 | |||
| 8 | d. | Insurance expense | 1500 | ||
| 9 | Prepaid insurance | 1500 | |||
| 10 | e. | Fees earned | 10200 | ||
| 11 | Accounts receivable | 10200 | |||
| 12 | f. | Supplies expense ($1725 - $615) | 1110 | ||
| 13 | Supplies | 1110 | |||
| 14 | g. | Unearned rent | 3300 | ||
| 15 | Rent revenue ($3600 - $300) | 3300 |
