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The unadjusted trial balance of the Home Perfection Company as of December 31, 2017 is found...

The unadjusted trial balance of the Home Perfection Company as of December 31, 2017 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Home Perfection Company.

  • 1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2017. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.

  • 2) Based on a physical count, supplies on hand total $4,500. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.

  • 3) The equipment is expected to have a 4-year useful life, and be worth about $9,000 at the end of four years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry to record the monthly depreciation, if any.

  • 4) On December 26, the client paid a $8,400 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any.

  • 5) Home Perfection's employee earns $150 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and prepare the necessary adjusting entry, if any.

  • 6) In the second week of December, Home Perfection agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $3,660. The terms of the initial agreement call for Home Perfection to provide services from December 12, 2017, through January 10, 2018, or 30 days of service. The club agrees to pay Home Perfection $3,660 on January 10, 2018, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.

Home Perfection
Trial Balance
December 31, 2017
Account Title Debit Credit
Cash 16,485
Supplies 4,500
Prepaid insurance 7,700
Equipment 30,600
Accumulated depreciation - Equipment 500
Accounts payable 6,200
Salaries payable 450
Unearned consulting revenue 7,700
C. Fields, Capital 44,000
C. Fields, Withdrawals 800
Consulting revenue 8,900
Rental revenue 400
Depreciation expense - Equipment 500
Salaries expense 3,000
Insurance expense 700
Rent expense 2,050
Supplies expense 1,500
Utilities expense 315
Total 68,150 68,150

Solutions

Expert Solution

Account Titles Debit Credit
a Insurance Expense $                321 =7700/24*1
       Prepaid Insurance $                321
(Prepaid Insurance expired during the period)
b Supplies Expense $                    -   =4500-4500
        Supplies $                   -  
(Supplies consumed during the period)
c Depreciation Expense $                450 =(30600-9000)/4*1/12
       Accumulated Depreciation $                450
(Depreciation expense recorded for the one month period)
d Unearned Consulting Revenue $                700 =8400/60*5
      Consulting Revenue $                700
(Service provided for advance received)
e Salaries Expense $                450 =3*150
       Salaries Payable $                450
(Salaries accrued but not paid)
f Unearned Consulting Revenue $             2,440 =122*20
      Consulting Revenue $            2,440
(Service provided for advance received)

ekkarill92 answered 2 years ago
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