Question

Ruth Lewis started her own consulting firm, Lewis Consulting, on May 1, 2020. The trial balance at May 31 is as follows. LEWIS CONSULTING Trial Balance May 31, 2020 Account Number Debit Credit 101 Cash $ 4,700 112 Accounts Receivable 6,100 126 Supplies 1,900 130 Prepaid Insurance 4,800 149 Equipment 12,600 201 Accounts Payable $ 4,800 209 Unearned Service Revenue 1,900 301 Owner’s Capital 20,000 400 Service Revenue 7,900 726 Salaries and Wages Expense 3,300 729 Rent Expense 1,200 $34,600 $34,600 In addition to those accounts listed on the trial balance, the chart of accounts for Lewis 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: 1. $800 of supplies have been used during the month. 2. Utilities expense incurred but not paid on May 31, 2020, $300. 3. The insurance policy is for 2 years. 4. $200 of the balance in the unearned service revenue account remains unearned at the end of the month. 5. May 31 is a Wednesday, and employees are paid on Fridays. Lewis Consulting has two employees, who are paid $1,000 each for a 5-day work week. 6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $210 per month for 60 months. 7. Invoices representing $1,700 of services performed during the month have not been recorded as of May 31.

(a) 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 1. May 31 631 126 2. May 31 732 201 3. May 31 722 130 4. May 31 209 400 5. May 31 726 212 6. May 31 717 150 7. May 31 112 400 Click if you would like to Show Work for this question: Open Show Work

Answer 1

No.	Date	Account Titles and Explanation	Ref.	Debit	Credit
1	May-31	Supplies expense	631	$800
		Supplies	126		$800
2	May-31	Utilities expense	732	$300
		Utilities payable	201		$300
3	May-31	Insurance expense	722	$200
		Prepaid insurance	130		$200
4	May-31	Unearned service revenue	209	$1,700
		Service revenue	400		$1,700
5	May-31	Salaries and wages expense	726	$1,200
		Salaries and wages payable	212		$1,200
6	May-31	Depreciation expense	717	$210
		Accumulated depreciation-equipment	150		$210
7	May-31	Accounts receivable	112	$1,700
		Service revenue	400		$1,700

Unearned service revenue, beginning = $1,900

Unearned service revenue, ending = $200

Unearned service revenue, earned = Unearned service revenue, beginning -Unearned service revenue, ending

= 1,900-200

= $1,700

Insurance expense for 2 years = $4,800

Insurance expense for 1 month = 4,800 x 1/24

= $200

Salaries and wages payable = 1,000 x 2 x 3/5

= $1,200

Kindly comment if you need further assistance. Thanks