Question

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019 the end of the current year, Pitman Company’s accounting clerk prepared the following unadjusted trial balance:

Pitman Company

UNADJUSTED TRIAL BALANCE

October 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,420.00
2	Accounts Receivable	38,360.00
3	Prepaid Insurance	7,320.00
4	Supplies	2,390.00
5	Land	117,000.00
6	Building	154,900.00
7	Accumulated Depreciation-Building		85,745.00
8	Equipment	130,900.00
9	Accumulated Depreciation-Equipment		97,550.00
10	Accounts Payable		11,735.00
11	Unearned Rent		7,130.00
12	Jan Pitman, Capital		227,645.00
13	Jan Pitman, Drawing	14,705.00
14	Fees Earned		325,550.00
15	Salaries and Wages Expense	193,870.00
16	Utilities Expense	42,220.00
17	Advertising Expense	22,740.00
18	Repairs Expense	17,455.00
19	Miscellaneous Expense	6,075.00
20	Totals	755,355.00	755,355.00

The data needed to determine year-end adjustments are as follows:

a.	Unexpired insurance at October 31, $5,850.
b.	Supplies on hand at October 31, $310.
c.	Depreciation of building for the year, $7,750.
d.	Depreciation of equipment for the year, $4,220.
e.	Unearned rent at October 31, $1,495.
f.	Accrued salaries and wages at October 31, $3,040.
g.	Fees earned but unbilled on October 31, $11,185.

	Required:
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.
2.	Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.

Answer 1

for Oct 31, 2019
ACCOUNT TITLE	Unadjusted Trial		Adjustment		Adjusted Trial
	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
Cash	$           7,420.00				$           7,420.00
Accounts Receivable	$         38,360.00		$      11,185.00		$         49,545.00
Prepaid Insurance	$           7,320.00			$        1,470.00	$           5,850.00
Supplies	$           2,390.00			$        2,080.00	$               310.00
Land	$      117,000.00				$      117,000.00
Building	$      154,900.00				$      154,900.00
Accumulated Depreciation-Building		$         85,745.00		$        7,750.00		$         93,495.00
Equipment	$      130,900.00				$      130,900.00
Accumulated Depreciation-Equipment		$         97,550.00		$        4,220.00		$      101,770.00
Accounts Payable		$         11,735.00				$         11,735.00
Salaries and Wages Payable				$        3,040.00		$           3,040.00
Unearned Rent		$           7,130.00	$        5,635.00			$           1,495.00
Jan Pitman, Capital		$      227,645.00				$      227,645.00
Jan Pitman, Drawing	$         14,705.00				$         14,705.00
Fees Earned		$      325,550.00		$      11,185.00		$      336,735.00
Rent Revenue				$        5,635.00		$           5,635.00
Salaries and Wages Expense	$      193,870.00		$        3,040.00		$      196,910.00
Utilities Expense	$         42,220.00				$         42,220.00
Advertising Expense	$         22,740.00				$         22,740.00
Repairs Expense	$         17,455.00				$         17,455.00
Supplies Expense			$        2,080.00		$           2,080.00
Depreciation Expense - Equipment			$        4,220.00		$           4,220.00
Depreciation Expense - Building			$        7,750.00		$           7,750.00
Insurance Expense			$        1,470.00		$           1,470.00
Miscellaneous Expense	$           6,075.00				$           6,075.00
Totals	$   755,355.00	$   755,355.00	$   35,380.00	$   35,380.00	$   781,550.00	$   781,550.00

	Particular	Debit	Credit
a)	Insurance Expense	$           1,470.00
	Prepaid Insurance		$           1,470.00
	(Being insurance expense for the year)
b)	Supplies Expense	$           2,080.00
	Supplies		$           2,080.00
	(Being supplies expense for the year)
c)	Depreciation Expense - Building	$           7,750.00
	Accumulated Depreciation-Building		$           7,750.00
	(Being Depreciation expense)
d)	Depreciation Expense - Equipment	$           4,220.00
	Accumulated Depreciation-Equipment		$           4,220.00
	(Being Depreciation expense)
e)	Unearned Rent	$           5,635.00
	Rent Revenue		$           5,635.00
	(Being Rent Revenue earned)
f)	Salaries and wages Expense	$           3,040.00
	Salaries and wages Payable		$           3,040.00
	(Being accured salaries and wages)
g)	Accounts Receivable	$         11,185.00
	Fee Earned		$         11,185.00
	(Being earned revenue but unbilled)