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
	Debit Balances		Credit Balances
Cash	4,020
Accounts Receivable	36,450
Prepaid Insurance	6,800
Supplies	1,850
Land	107,180
Building	273,310
Accumulated Depreciation—Building			130,960
Equipment	128,800
Accumulated Depreciation—Equipment			93,280
Accounts Payable			11,430
Unearned Rent			6,490
Jan Pitman, Capital			290,000
Jan Pitman, Drawing	14,210
Fees Earned			308,870
Salaries and Wages Expense	184,090
Utilities Expense	40,460
Advertising Expense	21,620
Repairs Expense	16,370
Miscellaneous Expense	5,870
	841,030		841,030

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

Required:

• Unexpired insurance at October 31, $4,560.
• Supplies on hand at October 31, $560.
• Depreciation of building for the year, $3,010.
• Depreciation of equipment for the year, $2,610.
• Unearned rent at October 31, $1,690.
• Accrued salaries and wages at October 31, $2,950.
• Fees earned but unbilled on October 31, $17,300.

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.

a.	Insurance Expense
	Prepaid Insurance
b.
c.
d.
e.
f.
g.

Feedback

1. Before you begin, identify which adjusting entry goes with which additional account. As you go through each of these, consider the other sides of the adjusting entry transaction and identify related accounts. Keep in mind that you will be making an adjusting entry for each of these that affects at least one income statement account (revenues or expenses) and one balance sheet account (assets or liabilities). In the case of the insurance transaction, you will have to calculate the amount of insurance expired. In the case of supplies, you will need to calculate the amount of supplies used (expense). In the case of rent, you will need to calculate the amount of rent earned (revenue).

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.

Pitman Company
Adjusted Trial Balance
October 31, 2019
	Debit Balances	Credit Balances
Cash
Accounts Receivable
Prepaid Insurance
Supplies
Land
Building
Accumulated Depreciation-Building
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Unearned Rent
Salaries and Wages Payable
Jan Pitman, Capital
Jan Pitman, Drawing

Answer 1