In: Accounting
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. | ||||||
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.)
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