Question

Linda Williams started her own consulting firm, Williams Consulting, on May 1, 2020. The trial balance at May 31 is as follows. WILLIAMS CONSULTING Trial Balance May 31, 2020 Account Number Debit Credit 101 Cash $ 4,500 112 Accounts Receivable 6,100 126 Supplies 2,300 130 Prepaid Insurance 4,800 149 Equipment 10,800 201 Accounts Payable $ 4,700 209 Unearned Service Revenue 2,100 301 Owner’s Capital 18,200 400 Service Revenue 8,300 726 Salaries and Wages Expense 3,400 729 Rent Expense 1,400 $33,300 $33,300 In addition to those accounts listed on the trial balance, the chart of accounts for Williams 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. $1,300 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. $400 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. Williams Consulting has two employees, who are paid $800 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 $180 per month for 60 months. 7. Invoices representing $1,800 of services performed during the month have not been recorded as of May 31.

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 SHOW LIST OF ACCOUNTS

Answer 1

No.	Date	Account Titles and Explanation	Ref.	Debit	Credit
1	May-31	Supplies expense	631	1,300
		Supplies	126		1,300
2	May-31	Utilities expense	732	300
		Accounts 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	4,800
		Salaries and wages payable	212		4,800
6	May-31	Depreciation expense	717	180
		Accumulated depreciation - Equipment	150		180
7	May-31	Accounts receivable	112	1,800
		Service revenue	400		1,800

2.

Insurance expense for 2 years = $4,800

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

= $200

4.

Unearned service revenue, unadjusted = $2,100

Unearned service revenue, ending = 400

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

= 2,100-400

= $1,700

5.

Salaries and wages payable on May 31 = Number of employees x Salary per employee per day x Number of days

= 2 x 800 x 3

= $4,800