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 7,710.00 2 Accounts Receivable 37,935.00 3 Prepaid Insurance 7,070.00 4 Supplies 2,125.00 5 Land 108,400.00 6 Building 145,300.00 7 Accumulated Depreciation-Building 85,610.00 8 Equipment 134,800.00 9 Accumulated Depreciation-Equipment 96,100.00 10 Accounts Payable 12,625.00 11 Unearned Rent 6,340.00 12 Jan Pitman, Capital 219,690.00 13 Jan Pitman, Drawing 15,120.00 14 Fees Earned 323,700.00 15 Salaries and Wages Expense 196,770.00 16 Utilities Expense 42,265.00 17 Advertising Expense 23,135.00 18 Repairs Expense 17,195.00 19 Miscellaneous Expense 6,240.00 20 Totals 744,065.00 744,065.00 The data needed to determine year-end adjustments are as follows: a. Unexpired insurance at October 31, $6,105. b. Supplies on hand at October 31, $485. c. Depreciation of building for the year, $7,140. d. Depreciation of equipment for the year, $4,445. e. Unearned rent at October 31, $1,890. f. Accrued salaries and wages at October 31, $3,330. g. Fees earned but unbilled on October 31, $11,475. 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.

Answer 1

1. Adjusting entries are as prepared below:

Date	Particulars	L.F	Amount ($)	Amount ($)
a.	Insurance Expense		965
	Prepaid Insurance			965
	(for insurance expensed)
b.	Supplies expense		1,640
	Supplies			1,640
	(for supplies expensed)
c.	Depreciation -Building		7,140
	Accumulated dep-building			7,140
	(for depreciation recorded)
d.	Depreciation -equipment		4,445
	Accumulated dep-equipment			4,445
	(for depreciation recorded)
e.	Unearned Rent		4,450
	Rent Revenue			4,450
	(for Rent earned)
f.	Salaries and wages expense		3,330
	Salaries and wages Payable			3,330
	(For salaries and wages accrued)
g.	Account receivable		11,475
	Fees Earned			11,475
	(For fees earned)

2. Adjusted Trial Balance

Pitman Company
Adjusted Trial Balance
October 31, 2019
	Debit	Credit
Cash	7,710
Account Receivable	49,410
Prepaid insurance	6,105
Supplies	485
land	108,400
Building	145,300
Accumulated depreciation		92,750
Equipment	134,800
Accumulated depreciation		100,545
Accounts payable		12,625
Unearned Rent		1,890
Salaries and Wages payable		3,330
Jan Pitman capital		219,690
Jan Pitman Drawing	15,120
Fees earned		335,175
Rent Revenue		4,450
Salaries and Wages Expense	200,100
Utilities Expense	42,265
Advertising Expense	23,135
Repairs Expense	17,195
Miscellaneous Expense	6,240
Insurance Expense	965
Supplies expense	1,640
Depreciation expense-Building	7,140
Depreciation -equipment	4,445
Total	770,455	770,455