Question

Following are the adjustment data for Bruno Company:

a-b.	Merchandise inventory (ending), $1,045.
c.	Professional fees earned, $32,100.
d.	Supplies inventory (on hand), $1,415.
e.	Insurance expired, $750.
f.	Depreciation of office equipment, $300.
g.	Wages accrued, $630.

Record these data in the Adjustments column of the following work sheet.

If an amount is zero, enter "0".

Bruno Company Worksheet
	TRIAL BALANCE		ADJUSTMENTS
ACCOUNT NAME	DEBIT	CREDIT	DEBIT	CREDIT
Cash	32,725
Accounts Receivable	960
Merchandise Inventory	1,250
Supplies	1,525
Prepaid Insurance	930
Office Equipment	5,450
Accum. Depr.-Office Equipment
Accounts Payable		480
M. Bruno, Capital		11,750
M. Bruno, Drawing	1,125
Unearned Professional Fees		34,700
Wages Expense	1,420
Advertising Expense	350
Rent Expense	700
Telephone Expense	130
Utilities Expense	190
Miscellaneous Expense	175
Income Summary
Professional Fees Income
Supplies Expense
Insurance Expense
Depr. Expense-Office Equipment
Wages Payable
	46,930	46,930

Carry the Income Summary account from the Adjustments columns into the Income Statement columns as two separate figures. For merchandise inventory, record the amount of the ending inventory in the Balance Sheet Debit column. For unearned revenue, record the unearned revenue account in the Balance Sheet Credit column and the revenue account in the Income Statement Credit column.

Complete the Income Statement and Balance Sheet columns of the work sheet for Bruno Company from Practice Exercise 3.

If an amount is zero, enter "0".

Bruno Company Worksheet
	TRIAL BALANCE		ADJUSTMENTS		INCOME STATEMENT		BALANCE SHEET
ACCOUNT NAME	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
Cash	32,725
Accounts Receivable	960
Merchandise Inventory	1,250
Supplies	1,525
Prepaid Insurance	930
Office Equipment	5,450
Accum. Depr.-Office Equipment
Accounts Payable		480
M. Bruno, Capital		11,750
M. Bruno, Drawing	1,125
Unearned Professional Fees		34,700
Wages Expense	1,420
Advertising Expense	350
Rent Expense	700
Telephone Expense	130
Utilities Expense	190
Miscellaneous Expense	175
Income Summary
Professional Fees Income
Supplies Expense
Insurance Expense
Depr. Expense-Office Equipment
Wages Payable
	46,930	46,930
Net Income

Take the adjusting entries recorded in the journal directly from the Adjustments columns of the work sheet.

Prepare the year-end adjusting entries from the Adjustments column of Bruno Company's work sheet from Practice Exercise 3.

GENERAL JOURNAL				PAGE 1
	DESCRIPTION	POST. REF.	DEBIT	CREDIT
(a)	Income Summary
	Merchandise Inventory
(b)	Merchandise Inventory
	Income Summary
(c)	Unearned Professional Fees
	Professional Fees Income
(d)	Supplies Expense
	Supplies
(e)	Insurance Expense
	Prepaid Insurance
(f)	Depreciation Expense, Office Equipment
	Accumulated Depreciation, Office Equipment
(g)	Wages Expense
	Wages Payable

Answer 1

Worksheet is as prepared below:

Bruno Company
Worksheet
	TRIAL BALANCE		ADJUSTMENTS		INCOME STATEMENT		BALANCE SHEET
ACCOUNT NAME	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
Cash	32,725						32,725
Accounts Receivable	960						960
Merchandise Inventory	1,250			205			1,045
Supplies	1,525			110			1,415
Prepaid Insurance	930			180			750
Office Equipment	5,450						5,450
Accum. Depr.-Office Equipment				300				300
Accounts Payable		480						480
M. Bruno, Capital		11,750						11750
M. Bruno, Drawing	1,125						1,125
Unearned Professional Fees		34,700	32,100					2,600
Wages Expense	1,420		630		2,050
Advertising Expense	350				350
Rent Expense	700				700
Telephone Expense	130				130
Utilities Expense	190				190
Miscellaneous Expense	175				175
Income Summary			205		205
Professional Fees Income				32,100		32,100
Supplies Expense			110		110
Insurance Expense			180		180
Depr. Expense-Office Equipment			300		300
Wages Payable				630				630
	46,930	46,930	33,525	33,525	4,390	32,100
Net Income					27,710			27,710
Total							43470	43470

Journal entries:

GENERAL JOURNAL				PAGE 1
	DESCRIPTION	POST. REF.	DEBIT	CREDIT
(a)	Income Summary		205
	Merchandise Inventory			205
(b)	Merchandise Inventory		205
	Income Summary			205
(c)	Unearned Professional Fees		32,100
	Professional Fees Income			32,100
(d)	Supplies Expense		110
	Supplies			110
(e)	Insurance Expense		750
	Prepaid Insurance			750
(f)	Depreciation Expense, Office Equipment		300
	Accumulated Depreciation, Office Equipment			300
(g)	Wages Expense		630
	Wages Payable			630