Question

5. Plover Corporation prepares monthly financial statements. Below are listed some selected accounts and their balances on the September 30 trial balance before any adjustments have been made for the month of September.

PLOVER CORPORATION

Trial Balance

September 30, 2018

——————————————————————————————————————————

                                                                                                                        Debit            Credit

Cash........................................................................................................       $12,300

Supplies...................................................................................................           2,700

Prepaid insurance...................................................................................           5,775

Equipment...............................................................................................         16,200

Accumulated depreciation—Equipment.................................................                              $ 540

Accounts payable....................................................................................                              1,100

Unearned revenue..................................................................................                              1,200

Common shares......................................................................................                            10,000

Retained earnings...................................................................................                            18,925

Rent revenue...........................................................................................                              6,360

Salaries expense.....................................................................................          1,150     _______

Total.........................................................................................................       $38,125      $38,125

An analysis of the account balances provided the following additional information:

1.    A physical count of supplies revealed $1,200 on hand on September 30.

2.    A two-year insurance policy was purchased on June 1 for $6,600.

3.    The equipment was purchased on July 1^st for $16,200 and has an estimated useful life of five years.

4. Rent received in advance that remains unearned at September 30 is $500.
5. Income tax of $800 is owed.

Instructions

(a)        Using the above additional information, prepare the adjusting entries that should be made by Plover on September 30 (adjusting entries are made on a monthly basis).

(b)        Prepare an adjusted trial balance at September 30.

Answer 1