Question

Porter Company shows the following accounts in its partial unadjusted trial balance at December 31, 2017. Dr Cr Cash $71,300 Accounts receivable 40,000 Trading securities 7,000 Available for sale securities 50,000 Allowance for Doubtful accounts 2,000 Furniture and Fixtures 181,000 Accumulated depreciation – F&F 14,000 Accounts Payable 10,800 Common Stock 104,000 Retained Earnings 75,000 Service Revenue 324,100 Insurance expense 11,300 Salaries Expense 149,700 Rent Expense 15,600 TOTALS $527,900 $527,900 Additional Information 1. On May 1, 2017, the company paid $8,700 to renew its comprehensive insurance coverage for one year. The premium on the previous 1-year policy, which expired on April 30, 2017, was $7,800. 2. Bad debts are estimated at 10% of gross accounts receivable. 3. On December 1, 2017, the company paid $2,400, for two months of rent, beginning on that date. 4. The company received $12,000 on November 1, 2017 from a customer for 3 months’ worth of services which will be provided by Porter in 2018. The company recorded the entire $12,000 in Service Revenue. 5. Employees are paid bi-weekly on Friday. December 31st fell on a Sunday. Employees average $1,000 for a five day work week. All salaries were paid in full on Friday, December 22nd for the week ended December 22nd.   

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Dec 31	Prepaid Insurance	5,800
	Insurance Expense		5,800
	(8,700 x 8/12)
Dec 31	Bade Debts Expense	2,000
	Allowance for Doubtful accounts		2,000
	(40,000 x 10%) - 2,000
Dec 31	Prepaid Rent	1,200
	Rent Expense		1,200
	(2,400 x 1/2)
Dec 31	Service Revenue	8,000
	Unearned Service Revenue		8,000
	(12,000 x 2/3)
Dec 31	Salaries Expense	400
	Salaries Payable		400
	(1,000 x 2/5)