Homework SourseProblem 39B Adjusting journal entries monthly L04 Ben Hallma
Problem 3-9B Adjusting journal entries (monthly) L04 Ben Hallmark, the owner of Hallmark Surveying Services, has been in business for two years. The unad justed trial balance at December 31, regarding the month just ended, follows: The following additional information is available on December 31, 2017: a. Depreciation on the equipment for the month was $430. b. $9,600 of the balance in Unearned Surveying Revenue is unearned at December 31. c. The balance in Prepaid Rent is for six months of rent beginning December 1. d. Accrued wages at month-end were $12,400. e. December\'s interest in the amount of $120 had accrued on the notes payable. f. Accrued surveying revenue at month-end totalled $21,800. g. The balance in Prepaid Advertising covers four months of advertising beginning December 15 h. A count of the supplies on December 31 showed $1,320 had been used. i. The December electricity bill for $2,340 was received on December 31. It is unrecorded and unpaid. Required Prepare adjusting journal entries for the month ended December 31, 2017, based on the above. Analysis Component: Explain the differences between Accumulated Depreciation and Depreciation Expense
Solution
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4.
Analysis:
The financing of the assets is as follows:
Assets financed by the owner : $58,902
Asets financed by debt : $74,260
Equity financing has increased by $30,250 (Net income $54,550 - Withdrawals $24,300)
This is a favourable change as the business will be dependent on own funds which will reduce the risk of not meeting the outside obligations.
| Cash | Accounts Receivable | Supplies | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 15600 | Dec.31 | 29200 | Dec.31 | 1640 | ||||||||
| 15600 | Dec.31 | 21800 | 51000 | Dec.31 | 1320 | 320 | |||||||
| Prepaid Advertising | Prepaid Rent | Surveying Equipment | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 1280 | Dec.31 | 17880 | Dec.31 | 58000 | ||||||||
| Dec.31 | 160 | 1120 | Dec.31 | 2980 | 14900 | 58000 | |||||||
| Accumulated Dep. - Surveying Eqpt. | Accounts Payable | Interest Payable | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 7348 | Dec.31 | 13800 | Dec.31 | 120 | 120 | |||||||
| Dec.31 | 430 | 7778 | Dec.31 | 2340 | 16140 | 120 | |||||||
| Wages Payable | Unearned Surveying Fee | Notes Payable | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 12400 | 12400 | Dec.31 | 14800 | Dec.31 | 36000 | |||||||
| 12400 | Dec.31 | 5200 | 9600 | 36000 | |||||||||
| Ben Hallmark - Capital | Ben Hallmark - Withdrawals | Surveying revenue | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 28652 | Dec.31 | 24300 | Dec.31 | 170948 | ||||||||
| 28652 | Dec.31 | 5200 | 176148 | ||||||||||
| Dec.31 | 21800 | 197948 | |||||||||||
| Depreciation Expense - Surveying Eqpt. | Salaries Expese | Wages Expense | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 430 | 430 | Dec.31 | 56000 | Dec.31 | 39726 | |||||||
| 56000 | Dec.31 | 12400 | 52126 | ||||||||||
| Interest Expense | Insurance Expense | Rent Expense | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 120 | 120 | Dec.31 | 6000 | Dec.31 | 2980 | 2980 | ||||||
| 6000 | |||||||||||||
| Supplies Expense | Advertiding Expense | Gas ad Oil Expense | |||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||
| Dec.31 | 2958 | Dec.31 | 160 | 160 | Dec.31 | 6564 | |||||||
| Dec.31 | 1320 | 4278 | 6564 | ||||||||||
| Repair Expense | Utilities Expense | ||||||||||||
| Date | Debit | Credit | Balance | Date | Debit | Credit | Balance | ||||||
| Dec.31 | 12400 | Dec.31 | 2340 | 2340 | |||||||||
| 12400 |
