Question

In: Accounting

Romero started his own consulting firm, Romero Company, on July 1, 2018. The trial balance at...

Romero started his own consulting firm, Romero Company, on July 1, 2018. The trial balance at July 31 is shown below.

ROMERO COMPANY

Trial Balance

July 31, 2018

Debit

Credit

Cash

23,150

Accounts receivable

5,000

Supplies

4,000

Prepaid insurance

3,000

Equipment

13,000

Notes payable

15,000

Accounts payable

7,500

Unearned service revenue

4,000

Owner’s capital

18,750

Service revenue

12,900

Salaries and wages expense

7,000

Rent expense

3,000

$ 58,150

$ 58,150

Other data:

1. Supplies on hand at July 31 are $750.

2. A utility bill for $350 has not been recorded and will not be paid until next month.

3. The insurance policy is for a year.

4. $1,200 of unearned service revenue remain unearned.

5. Romero company pays its employees total salaries of $7,250 every Monday for the preceding 5-day week (Monday through Friday). On Monday July 30, employees were paid for the week ending July 27. All employees worked the last 2 days of the month of July 2018.

6. The equipment is being depreciated over a 5-year life with no salvage value.

7. Invoices representing $3,200 of services performed during the month have not been recorded as of July 31.

8. Romero company borrowed $15,000 by signing a 7.3%, two-year note on July 11th, 2018.

Instructions

a. Prepare the adjusting entries for the month of July.

b. Prepare the Classified Balance sheet at Dec. 31, 2018.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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