Homework SourseThe FastForward Company began operations on December 1 2017
The FastForward Company began operations on December 1, 2017. The unadjusted trial balance of the FastForward Company as of December 31, 2017 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the FastForward Company.
1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2017. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.
2) Based on a physical count, supplies on hand total $8,670. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.
3) The equipment is expected to have a 5-year useful life, and be worth about $8,000 at the end of five years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry, if any.
4) On December 26, the client paid a $3,000 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any.
5) FastForward\'s employees earns $70 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and prepare the necessary adjusting entry, if any.
6) In the second week of December, FastForward agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $2,700. The terms of the initial agreement call for FastForward to provide services from December 12, 2017, through January 10, 2018, or 30 days of service. The club agrees to pay FastForward $2,700 on January 10, 2018, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.
Prepare the required adjusting and closing entries for the FastForward Company.
Complete the worksheet for the FastForward Company
FastForward Trial Balance December 31, 2017 Account Title Debit Credit 4,275 1,800 8,670 2,200 26,000 Cash Accounts receivable Supplies Prepaid insurance Equipment Accumulated depreciation Equipment Accounts payable Salaries pavable Unearned consulting revenue C. Taylor, Capital C. Taylor, Withdrawals Consulting revenue Rental revenue Depreciation expense Salaries expense Insurance expense Rent expense Supplies expense Utilities expense 300 6,200 210 2,750 30,000 200 7,850 300 300 1,610 200 1,000 1,050 305 47,610 S Total 47,610Solution
Answers
Adjustment no.
Accounts Title
Debit
Credit
Working
1
Insurance expenses
$ 100.00
$2400 for 24 months; for Dec = 2400/24
Prepaid Insurance
$ 100.00
(expired insurance of 1 month)
2
Supplies expenses
$ 1,050.00
Unadjusted balancce = 9720, physical bal = 8670, diff = 9720 - 8670 =consumed
Supplies
$ 1,050.00
(supplies used during the period)
3
Depreciation expenses
$ 300.00
[(( 26000 - 8000)/5 years) x 1/12]
Accumulated Depreciation
$ 300.00
(1 month depreciation recorded)
4
Unearned Consulting Revenue
$ 250.00
$3000 for 60 days; Dec 27 to Dec 31 = 5 days: 3000x5/60
Consulting Revenue
$ 250.00
( revenue earned for 5 days)
5
Salaries expenses
$ 210.00
Salaries accrued from 29 Dec to 31 Dec = 3 days x $70
Salaries payable
$ 210.00
[3 days salaries aaccrued: Dec 29(mon) 30 (tues) 31 (wed)]
6
Accounts receivables
$ 1,800.00
$2700 for 30 days; 12 Dec to 31 Dec = 20 days x 2700/30days
Consulting Revenue
$ 1,800.00
(20 days revenue earned0
Unadjusted Trial balance
Adjustments
Adjusted Trial Balance
Income Statement
St. of Owner\'s Equity & Balance Sheet
Dr
Cr
Dr
Cr
Dr
Cr
Dr
Cr
Dr
Cr
Cash
$ 4,275.00
$ 4,275.00
$ 4,275.00
Accounts receivables
$ 1,800.00
$ 1,800.00
$ 1,800.00
Supplies
$ 9,720.00
$ 1,050.00
$ 8,670.00
$ 8,670.00
Prepaid Insurance
$ 2,400.00
$ 100.00
$ 2,300.00
$ 2,300.00
Equipment
$ 26,000.00
$ 26,000.00
$ 26,000.00
Accumulated Depreciation
$ 300.00
$ 300.00
$ 300.00
Accounts payable
$ 6,200.00
$ 6,200.00
$ 6,200.00
Salaries payable
$ 210.00
$ 210.00
$ 210.00
Unearned Consulting Revenue
$ 3,000.00
$ 250.00
$ 2,750.00
$ 2,750.00
C. taylor Capital
$ 30,000.00
$ 30,000.00
$ 30,000.00
C. Taylor Withdrawls
$ 200.00
$ 200.00
$ 200.00
Consulting Revenue
$ 5,800.00
$ 250.00
$ 7,850.00
$ 7,850.00
$ 1,800.00
Rental Revenue
$ 300.00
$ 300.00
$ 300.00
Depreciation expenses
$ 300.00
$ 300.00
$ 300.00
Salaries expenses
$ 1,400.00
$ 210.00
$ 1,610.00
$ 1,610.00
Insurance expenses
$ 100.00
$ 100.00
$ 100.00
Rent Expenses
$ 1,000.00
$ 1,000.00
$ 1,000.00
Supplies expenses
$ 1,050.00
$ 1,050.00
$ 1,050.00
Utilities expenses
$ 305.00
$ 305.00
$ 305.00
Totals
$ 45,300.00
$ 45,300.00
$ 3,710.00
$ 3,710.00
$ 47,610.00
$ 47,610.00
$ 4,365.00
$ 8,150.00
$ 43,245.00
$ 39,460.00
Net Income
$ 3,785.00
$ 3,785.00
Totals
$ 8,150.00
$ 8,150.00
$ 43,245.00
$ 43,245.00
Closing entry no.
Accounts Title
Debit
Credit
1
Consulting Revenue
$ 7,850.00
Rental Revenue
$ 300.00
Income Summary
$ 8,150.00
(revenue a/c closed)
2
Income Summary
$ 4,365.00
Depreciation expenses
$ 300.00
Salaries expenses
$ 1,610.00
Insurance expenses
$ 100.00
Rent Expenses
$ 1,000.00
Supplies expenses
$ 1,050.00
Utilities expenses
$ 305.00
(expenses account closed)
3
Income Summary
$ 3,785.00
C. taylor Capital
$ 3,785.00
(net income balance in income summary closed)
4
C. taylor Capital
$ 200.00
C. Taylor Withdrawls
$ 200.00
(withdrawl a/c closed)
| Adjustment no. | Accounts Title | Debit | Credit | Working |
| 1 | Insurance expenses | $ 100.00 | $2400 for 24 months; for Dec = 2400/24 | |
| Prepaid Insurance | $ 100.00 | |||
| (expired insurance of 1 month) | ||||
| 2 | Supplies expenses | $ 1,050.00 | Unadjusted balancce = 9720, physical bal = 8670, diff = 9720 - 8670 =consumed | |
| Supplies | $ 1,050.00 | |||
| (supplies used during the period) | ||||
| 3 | Depreciation expenses | $ 300.00 | [(( 26000 - 8000)/5 years) x 1/12] | |
| Accumulated Depreciation | $ 300.00 | |||
| (1 month depreciation recorded) | ||||
| 4 | Unearned Consulting Revenue | $ 250.00 | $3000 for 60 days; Dec 27 to Dec 31 = 5 days: 3000x5/60 | |
| Consulting Revenue | $ 250.00 | |||
| ( revenue earned for 5 days) | ||||
| 5 | Salaries expenses | $ 210.00 | Salaries accrued from 29 Dec to 31 Dec = 3 days x $70 | |
| Salaries payable | $ 210.00 | |||
| [3 days salaries aaccrued: Dec 29(mon) 30 (tues) 31 (wed)] | ||||
| 6 | Accounts receivables | $ 1,800.00 | $2700 for 30 days; 12 Dec to 31 Dec = 20 days x 2700/30days | |
| Consulting Revenue | $ 1,800.00 | |||
| (20 days revenue earned0 |
