In: Accounting
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify).
Account Titles | Debit | Credit | |||||
Cash | $ | 6 | |||||
Accounts Receivable | 3 | ||||||
Supplies | 2 | ||||||
Equipment | 5 | ||||||
Accumulated Depreciation | $ | 0 | |||||
Software | 10 | ||||||
Accumulated Amortization | 4 | ||||||
Accounts Payable | 6 | ||||||
Notes Payable (long-term) | 0 | ||||||
Salaries and Wages Payable | 0 | ||||||
Interest Payable | 0 | ||||||
Income Tax Payable | 0 | ||||||
Deferred Revenue | 0 | ||||||
Common Stock | 14 | ||||||
Retained Earnings | 2 | ||||||
Service Revenue | 0 | ||||||
Supplies Expense | 0 | ||||||
Depreciation Expense | 0 | ||||||
Salaries and Wages Expense | 0 | ||||||
Amortization Expense | 0 | ||||||
Interest Expense | 0 | ||||||
Income Tax Expense | 0 | ||||||
Totals | $ | 26 | $ | 26 | |||
Transactions during 2018 (summarized in thousands of dollars) follow:
Data for adjusting journal entries on December 31:
Journal Entries
Journal Entries | Dr. ($) | Cr. ($) | |
a | cash | 16 | |
To notes payable | 16 | ||
b | equipment | 23 | |
To cash | 23 | ||
c | cash | 5 | |
To common stock | 5 | ||
d | equipment | 3 | |
To cash | 3 | ||
e | supplies | 10 | |
To accounts payable | 10 | ||
f | cash | 51 | |
accounts receivable | 9 | ||
To service revenue | 60 | ||
g | salaries and wages expenses | 24 | |
To cash | 24 | ||
h | cash | 8 | |
To accounts receivable | 8 | ||
i | accounts payable | 11 | |
To cash | 11 | ||
j | cash | 4 | |
To deferred revenue | 4 |
Adjusting Journal Entries
Adjusting Journal Entries | Dr. ($) | Cr. ($) | |
a | amortization expenses | 4 | |
To accumulated amortization | 4 | ||
b | supplies expenses (2+10-4) | 8 | |
To supplies | 8 | ||
c | depreciation expenses | 2 | |
To accumulated depreciation | 2 | ||
d | interest expenses | 5 | |
To interest payable | 5 | ||
e | salaries and wages expenses | 3 | |
To salaries and wages payable | 3 | ||
f | income tax expenses | 4 | |
To income tax payable | 4 |
Adjusted Trial Balance
Adjusted Trial Balance | ||
Accounts | Dr. ($) | Cr. ($) |
Cash | 29 | |
Accounts Receivable | 4 | |
Supplies | 4 | |
Equipment | 31 | |
Accumulated Depreciation | 2 | |
Software | 10 | |
Accumulated Amortization | 8 | |
Accounts Payable | 5 | |
Notes Payable (long-term) | 16 | |
Salaries and Wages Payable | 3 | |
Interest Payable | 5 | |
Income Tax Payable | 4 | |
Deferred Revenue | 4 | |
Common Stock | 19 | |
Retained Earnings | 2 | |
Service Revenue | 60 | |
Supplies Expense | 8 | |
Depreciation Expense | 2 | |
Salaries and Wages Expense | 27 | |
Amortization Expense | 4 | |
Interest Expense | 5 | |
Income Tax Expense | 4 | |
Totals | 128 | 128 |