Question

In: Accounting

Metlock started her own consulting firm, Metlock, Inc., on May 1, 2020. The trial balance at May 31 is as follows.

Practice Problem 01 a-c (Part Level Submission)

Metlock started her own consulting firm, Metlock, Inc., on May 1, 2020. The trial balance at May 31 is as follows.

Metlock, Inc.
Trial Balance
May 31, 2020

Account Number


Debit
Credit
101
Cash
$ 4,700

112
Accounts Receivable
5,900

126
Supplies
1,800

130
Prepaid Insurance
2,400

149
Equipment
10,200

201
Accounts Payable


$ 4,800
209
Unearned Service Revenue


2,100
311
Common Stock


14,100
400
Service Revenue


8,400
726
Salaries and Wages Expense
3,300

729
Rent Expense
1,100





$29,400
$29,400


In addition to those accounts listed on the trial balance, the chart of accounts for Metlock, Inc. 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.
$500 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. Nardelli Consulting has two employees, who are paid $800 each for a 5-day work week.
6.
The equipment has a 5-year life with no salvage value. It is being depreciated at $170 per month for 60 months.
7.
Invoices representing $1,600 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.)

Solutions

Expert Solution

Journal

1 May 31 Supplies expense 800
Supplies 800
2 May 31 Utilities expense 300
Accounts payable 300
3 May 31 Insurance Expense 100
Prepaid Insurance 100
4 May 31 Unearned Service Revenue 1,600
Service Revenue 1,600
May 31 Salaries and Wages Expense 4,800
Salaries and Wages Payable 4,800
May 31 Depreciation Expense 170
Accumulated Depreciation—Equipment 170
May 31 Accounts Receivable 1,600
Service Revenue 1,600

Prepaid Insurance for 2 years = $2,400

Insurance expense for 1 month = 2,400/12

= $200

Salaries and Wages Payable on May 31 = Salary per employee per day x Number of employees x Number of days

= 800 x 2 x 3

= $4,800


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