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	4,480
Accounts Receivable	40,700
Prepaid Insurance	7,590
Supplies	2,070
Land	119,670
Building	295,880
Accumulated Depreciation—Building			146,230
Equipment	143,810
Accumulated Depreciation—Equipment			104,150
Accounts Payable			12,760
Unearned Rent			7,240
Jan Pitman, Capital			314,500
Jan Pitman, Drawing	15,860
Fees Earned			344,880
Salaries and Wages Expense	205,550
Utilities Expense	45,180
Advertising Expense	24,140
Repairs Expense	18,280
Miscellaneous Expense	6,550
	929,760		929,760

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

Required:

Unexpired insurance at October 31, $5,090.

Supplies on hand at October 31, $620.

Depreciation of building for the year, $3,360.

Depreciation of equipment for the year, $2,920.

Unearned rent at October 31, $1,880.

Accrued salaries and wages at October 31, $3,290.

Fees earned but unbilled on October 31, $19,310.

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.

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

question 2

Adjusting Entries and Errors

At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney:

Net income for August	$188,100
Total assets at August 31	1,036,000
Total liabilities at August 31	342,000
Total owner’s equity at August 31	694,000

In preparing the financial statements, adjustments for the following data were overlooked:

Required:

Unbilled fees earned at August 31, $6,090.

Depreciation of equipment for August, $2,700.

Accrued wages at August 31, $1,950.

Supplies used during August, $1,710.

1. Journalize the entries to record the omitted adjustments.

2. Determine the correct amount of net income for August and the total assets, liabilities, and owner’s equity at August 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by completing the columnar table below. Use the minus sign to indicate decreases. If an effect is zero, enter "0". Adjustment (a) is presented as an example.

question 3

Adjusting Entries

Good Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On November 30, 2019, the end of the current year, the accountant for Good Note prepared the following trial balances:

Good Note Company
Trial Balance
November 30, 2019
	Unadjusted				Adjusted
	Debit Balances		Credit Balances		Debit Balances		Credit Balances
Cash	30,970				30,970
Accounts Receivable	88,710				88,710
Supplies	9,210				2,860
Prepaid Insurance	11,720				2,230
Equipment	420,200				420,200
Accumulated Depreciation—Equipment			76,580				86,540
Automobiles	92,900				92,900
Accumulated Depreciation—Automobiles			44,360				46,580
Accounts Payable			20,090				20,890
Salaries Payable			—				6,280
Unearned Service Fees			14,650				5,090
Robin Stahl, Capital			448,000				448,000
Robin Stahl, Drawing	60,680				60,680
Service Fees Earned			597,790				607,350
Salary Expense	418,450				424,730
Rent Expense	43,520				43,520
Supplies Expense	—				6,350
Depreciation Expense—Equipment	—				9,960
Depreciation Expense—Automobiles	—				2,220
Utilities Expense	10,460				11,260
Taxes Expense	6,700				6,700
Insurance Expense	—				9,490
Miscellaneous Expense	7,950				7,950
	1,201,470		1,201,470		1,220,730		1,220,730

Required:

Journalize the seven entries that adjusted the accounts at November 30. None of the accounts were affected by more than one adjusting entry.

Answer 1

Q1

Adjusting Entries

Insurance expense	$    5,090
Prepaid insurance		$    5,090
Supplies expense ($2,070-$620)	$    1,450
Supplies		$    1,450
Depreciation expense	$    3,360
Accumulated depreciation - Building		$    3,360
Depreciation expense	$    2,920
Accumulated depreciation - Equipment		$    2,920
Unearned rent ($7,240-$1,880)	$    5,360
Rent revenue		$    5,360
Salaries and wages expense	$    3,290
Salaries and wages payable		$    3,290
Accounts receivable	$ 19,310
Fees earned		$ 19,310

Adjusted trial balance

Pitman Company
Adjusted trial balance
October 31, 2019
	Debit	Credit
Cash	$      4,480
Accounts receivable ($40,700+$19,310)	$    60,010
Prepaid insurance ($7,590-$5,090)	$      2,500
Supplies	$          620
Land	$ 119,670
Building	$ 295,880
Accumulated depreciation - Building ($146,230+$3,360)		$ 149,590
Equipment	$ 143,810
Accumulated depreciation - Equipment ($104,150+$2,920)		$ 107,070
Accounts payable		$    12,760
Unearned rent		$      1,880
Salaries and wages payable		$      3,290
Jan Pitman Capital		$ 314,500
Jan Pitman Drawings	$    15,860
Fees Earned ($344,880+$19,310)		$ 364,190
Rent revenue ($7,240-$1,880)		$      5,360
Salaries and wages expense ($205,550+$3,290)	$ 208,840
Utilities expense	$    45,180
Advertising expense	$    24,140
Repairs expense	$    18,280
Misc. expense	$      6,550
Supplies expense ($2,070-$620)	$      1,450
Insurance expense	$      5,090
Depreciation expense ($3,360+$2,920)	$      6,280
	$ 958,640	$ 958,640