Question

The balances of the ledger accounts for Buffet Services on September 30, 2019, and the information needed for adjustments are shown below.

  

Account Name	Balance
Cash	$	17,500
Accounts Receivable		8,800
Supplies		3,300
Prepaid Insurance		8,700
Equipment		20,400
Accumulated Depreciation–Equipment		−
Accounts Payable		8,200
Jane Buffet, Capital		48,000
Jane Buffet, Drawing		3,900
Fees Income		28,000
Advertising Expense		3,000
Rent Expense		5,100
Salaries Expense		11,800
Supplies Expense		−
Insurance Expense		−
Utilities Expense		1,700
Depreciation Expense–Equipment		−

   
Adjustment information:

The supplies were purchased on September 1, 2019. An inventory of supplies showed $2,100 on hand on September 30, 2019.

The amount of Prepaid Insurance represents a payment made September 1, 2019, for a six-month insurance policy.

The equipment, purchased September 1, 2019, has an estimated useful life of 5 years with no salvage value. The firm uses the straight-line method of depreciation.

  
Prepare the Trial Balance section, record the adjustments, and complete the worksheet.

Answer 1

Account Name	Amount	Adjustments	Adjusted TB
Cash	17,500		17,500
Accounts Receivable	8,800		8,800
Supplies	3,300	(1,200)	2,100
Prepaid Insurance	8,700	(1,450)	7,250
Equipment	20,400	(340)	20,060
Accumulated Depreciation–Equipment		340	340
Accounts Payable	8,200		8,200
Jane Buffet, Capital	48,000		48,000
Jane Buffet, Drawing	3,900		3,900
Fees Income	28,000		28,000
Advertising Expense	3,000		3,000
Rent Expense	5,100		5,100
Salaries Expense	11,800		11,800
Supplies Expense		1,200	1,200
Insurance Expense		1,450	1,450
Utilities Expense	1,700		1,700
Depreciation Expense–Equipment			-