Question

The December 31, Year 1, unadjusted trial balance for a company is presented below.

  

Accounts	Debit				Credit
Cash	$	9,900
Accounts Receivable		14,900
Prepaid Rent		7,080
Supplies		3,900
Deferred Revenue					$	2,900
Common Stock						10,000
Retained Earnings						5,900
Service Revenue						51,480
Salaries Expense		34,500
	$	70,280			$	70,280

  
At year-end, the following additional information is available:

1. The balance of Prepaid Rent, $7,080, represents payment on October 31, Year 1, for rent from November 1, Year 1, to April 30, Year 2.

2. The balance of Deferred Revenue, $2,900, represents payment in advance from a customer. By the end of the year, $725 of the services have been provided.

3. An additional $600 in salaries is owed to employees at the end of the year but will not be paid until January 4, Year 2.

4. The balance of Supplies, $3,900, represents the amount of office supplies on hand at the beginning of the year of $1,650 plus an additional $2,250 purchased throughout Year 1. By the end of Year 1, only $790 of supplies remains.

Required:

1. Update account balances for the year-end information by recording any necessary adjusting entries. No prior adjustments have been made in Year 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Answer 1

Transaction	General Journal	Debit	Credit
a	Rent expense	2360		=7080*2/6
	Prepaid Rent		2360
b	Deferred Revenue	725
	Service Revenue		725
c	Salaries Expense	600
	Salaries Payable		600
d	Supplies expense	3110		=3900-790
	Supplies		3110