Question

Reyes Rides is owned by Jason Reyes. The company has an August 31 fiscal year end and prepares adjustments on an annual basis. The following is an alphabetical list of its accounts at August 31, 2021, before adjustments. All accounts have normal balances. Accounts Payable $5,740 Accounts Receivable 7,500 Accumulated Depreciation—Equipment 25,875 Accumulated Depreciation—Vehicles 175,750 Cash 8,650 Equipment 41,400 Fuel Expense 23,900 Interest Expense 9,660 J. Reyes, Capital 105,030 J. Reyes, Drawings 140,600 Notes Payable 150,000 Prepaid Insurance 12,420 Rent Expense 23,060 Salaries Expense 140,570 Service Revenue 343,745 Supplies 4,470 Unearned Revenue 27,890 Vehicles 421,800 Additional information: 1. On August 31, a physical count shows $620 of supplies on hand. 2. The insurance policy has a one-year term that began on November 1, 2020. 3. The equipment has an estimated useful life of 10 years. The vehicles have an estimated useful life of 12 years. 4. The company collects cash in advance for any special services requested by customers. As at August 31, the company has provided all but $4,600 of these services. 5. The note payable has an annual interest rate of 7%. Interest is paid on the first day of each month. 6. Employees are paid a combined total of $580 per day. At August 31, 2021, five days of salaries are unpaid. 7. On August 31, the company provided $1,360 of services for a senior citizens’ group. The group was not billed for the services until September 2. 8. Additional fuel costs of $640 have been incurred but not recorded. (Use the Accounts Payable account.)

(a) Prepare T accounts and enter the unadjusted trial balance amounts. (Post entries in the order displayed in the problem statement.)

Answer 1

Requirement (a):

Cash
Unadj. Bal.	8,650
Accounts Receivable
Unadj. Bal.	7,500
Supplies
Unadj. Bal.	4,470
Prepaid Insurance
Unadj. Bal.	12,420
Equipment
Unadj. Bal.	41,400
Accumulated Depreciation—Equipment
		Unadj. Bal.	25,875
Vehicles
Unadj. Bal.	421,800
Accumulated Depreciation—Vehicles
		Unadj. Bal.	175,750
Accounts Payable
		Unadj. Bal.	$5,740
Unearned Revenue
		Unadj. Bal.	27,890
Notes Payable
		Unadj. Bal.	150,000
J. Reyes, Capital
		Unadj. Bal.	105,030
J. Reyes, Drawings
Unadj. Bal.	140,600
Service Revenue
		Unadj. Bal.	343,745
Fuel Expense
Unadj. Bal.	23,900
Interest Expense
Unadj. Bal.	9,660
Rent Expense
Unadj. Bal.	23,060
Salaries Expense
Unadj. Bal.	140,570