Question

On August 1, 2012, Lincoln Services was started and at the end of the year December 31, 2012, had the following unadjusted trial balance. please prepare the year-end adjusting and closing entries. please record the transactions in the General Journal provided.

Account Title	Debit	Credit
Cash	17,500
Supplies	8,900
Prepaid Insurance	6200
Equipment	131000
Accumulated Depreciation Equipment		25250
Account Payable		5800
Interest Payable		0
rent payable		0
wages payable		0
property tax payable		0
notes payable		24000
common Stock		77600
dividends	30000
construction fees earned		134000
depreciation expense	0
wage expense	45860
interest expense	2640
insurance expense	0
rent expense	13200
supply expense	0
property tax expense	4600
repair expense	2810
utility expense	4000
totals	266710	26710

Data for ajusting and closing Entries

1. Supplies available at year-end amount $3200

2. Expired prepaid insurance at year end amounted $3900

3.Depriciation on the equiment $ 8500

4. The december utility expense of $550 has not yet been recorded.

5. At year end employees had accrued wages owed of $1600

6. The accrued rent expense for december is $200

7. Property taxes assessed not yet paid amount to $900

8. Interest on the Note Payable for December amouts to $240

Answer 1

Adjusting entries:

	Date	Account title and Explanation	Debit	Credit
1	Dec 31	Supplies expense [8,900-3,200]	$5,700
		Supplies		$5,700
		[To record supplies expense]
2	Dec 31	Insurance expense	$3,900
		Prepaid insurance		$3,900
		[To record insurance expense]
3	Dec 31	Depreciation expense	$8,500
		Accumulated depreciation-equipment		$8,500
		[To record depreciation expense]
4	Dec 31	Uilities expense	$550
		Accounts payable		$550
		[To record accrued utilities expense]
5	Dec 31	Wages expense	$1,600
		Wages payable		$1,600
		[To record accrued wages expense]
6	Dec 31	Rent expense	$200
		Rent payable		$200
		[To record accrued rent expense]
7	Dec 31	Property tax expense	$900
		Property tax payable		$900
		[To record accured property taxes expense]
	Dec 31	Interest expense	$240
		Interest payable		$240
		[To record accrued interest expense]

Closing Entries:

Date	Account title and Explanation	Debit	Credit
Dec.31	Construction fees earned	$134,000
	Income Summary		$134,000
	[To close revenue accounts]
Dec.31	Income summary	$94,700
	depreciation expense		$8,500
	wage expense [45860+1600]		$47,460
	interest expense [2640+240]		$2,880
	insurance expense		$3,900
	rent expense [13,200+200]		$13,400
	supply expense		$5,700
	property tax expense [4600+900]		$5,500
	repair expense		$2,810
	utility expense [4000+550]		$4,550
	[To close epxenses accounts]
Dec.31	Income Summary [134000-94700]	$39,300
	Retained earnings		$39,300
	[To close income summary account]
Dec.31	Retained earnings	$30,000
	dividends		$30,000
	[To close dividends accounts]