Question

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019 the end of the current year, Pitman Company’s accounting clerk prepared the following unadjusted trial balance:

Pitman Company

UNADJUSTED TRIAL BALANCE

October 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,655.00
2	Accounts Receivable	38,345.00
3	Prepaid Insurance	7,075.00
4	Supplies	2,290.00
5	Land	113,500.00
6	Building	149,450.00
7	Accumulated Depreciation-Building		87,905.00
8	Equipment	133,250.00
9	Accumulated Depreciation-Equipment		96,435.00
10	Accounts Payable		11,860.00
11	Unearned Rent		6,705.00
12	Jan Pitman, Capital		220,820.00
13	Jan Pitman, Drawing	14,690.00
14	Fees Earned		328,600.00
15	Salaries and Wages Expense	198,220.00
16	Utilities Expense	42,120.00
17	Advertising Expense	22,315.00
18	Repairs Expense	17,210.00
19	Miscellaneous Expense	6,205.00
20	Totals	752,325.00	752,325.00

The data needed to determine year-end adjustments are as follows:

a.	Unexpired insurance at October 31, $5,860.
b.	Supplies on hand at October 31, $545.
c.	Depreciation of building for the year, $7,985.
d.	Depreciation of equipment for the year, $4,080.
e.	Unearned rent at October 31, $1,145.
f.	Accrued salaries and wages at October 31, $3,490.
g.	Fees earned but unbilled on October 31, $11,640.

	Required:
1.	Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation Expense—Building, Depreciation Expense—Equipment and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.
2.	Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 130/176

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2	✔	✔
3		✔
4	✔	✔
5		✔
6	✔
7		✔
8	✔
9
10	✔	✔
11		✔
12	✔	✔
13		✔
14	✔	✔
15		✔

2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.

Question not attempted.

Pitman Company

ADJUSTED TRIAL BALANCE

Score: 0/103

October 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Prepaid Insurance
4	Supplies
5	Land
6	Building
7	Accumulated Depreciation-Building
8	Equipment
9	Accumulated Depreciation-Equipment
10	Accounts Payable
11	Unearned Rent
12	Salaries and Wages Payable
13	Jan Pitman, Capital
14	Jan Pitman, Drawing
15	Fees Earned
16	Rent Revenue
17	Salaries and Wages Expense
18	Utilities Expense
19	Advertising Expense
20	Repairs Expense
21	Depreciation Expense-Building
22	Depreciation Expense-Equipment
23	Insurance Expense
24	Supplies Expense
25	Miscellaneous Expense
26	Totals

Answer 1

Adjusting entries
S.no.	Accounts title and explanations		Debit $	Credit$
a.	Insurance expense			1215
	Prepaid insurance				1215
	(for expired insurance)
b.	Supplies expense			1745
	Supplies					1745
	(for supplies consumed)
c.	Depreciation expense		7985
	Accumulated depreciation-Building		7985
	(for depreciation charged)
d.	Depreciation expense		4080
	Accumulated dep-Equipment			4080
	(for depreciation charged)
e.	Unearned rent			5560
	Rent revenue (6705-1145)			5560
	(for rental reveu earned)
f.	Salaries and wages expense		3490
	Salaries and wages payable			3490
	(for salaries due)
g.	Accounts receivable			11640
	Fees earned				11640
	(for service revenu earned)
Adjusted Trial balance
				Debit $	Credit $
Cash				7655
Accounts receivable			49985
Prepaid insurance			5860
Supplies				545
land				113500
Building				149450
Accumulated dep-Building			95890
Equipment			133250
Accumulated dep -Equipment			100515
Accounts payable				11860
Unearned rent				1145
Salaries and wages payable			3490
Jan, Pitman, capital				220820
Jan, pitman withdrawal		14690
Fees earned				340240
Rent revenue				5560
Salaries and wages expense		201710
Utilities expenses			42120
Advertising expenss			22315
Repairs expense			17210
Misc expense			6205
Depreciation expense-Building		7985
Depreciation expense-Equipment	4080
Insurance expense			1215
Supplies expense			1745
TOTAL				779520	779520