Question

Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On January 31, 20Y1, the end of the current year, Sears Editing Company’s accounting clerk prepared the following unadjusted trial balance:

Sears Editing Company

UNADJUSTED TRIAL BALANCE

January 31, 20Y1

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,420.00
2	Accounts Receivable	38,115.00
3	Prepaid Insurance	7,050.00
4	Supplies	1,630.00
5	Land	114,550.00
6	Building	150,250.00
7	Accumulated Depreciation-Building		88,800.00
8	Equipment	133,200.00
9	Accumulated Depreciation-Equipment		96,605.00
10	Accounts Payable		12,560.00
11	Unearned Rent		7,035.00
12	Common Stock		74,980.00
13	Retained Earnings		142,235.00
14	Dividends	15,055.00
15	Fees Earned		327,900.00
16	Salaries and Wages Expense	194,870.00
17	Utilities Expense	42,345.00
18	Advertising Expense	22,335.00
19	Repairs Expense	17,690.00
20	Miscellaneous Expense	5,605.00
21	Totals	750,115.00	750,115.00

The data needed to determine year-end adjustments are as follows:

a.	Unexpired insurance at January 31, $6,130.
b.	Supplies on hand at January 31, $615.
c.	Depreciation of building for the year, $7,610.
d.	Depreciation of equipment for the year, $4,300.
e.	Rent unearned at January 31, $1,490.
f.	Accrued salaries and wages at January 31, $3,040.
g.	Fees earned but unbilled on January 31, $10,865.

	Required:
1.	Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.
2.	Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

Answer 1

SEARS EDITING COMPANY
JOURNAL ENTRIES
DATE	PARTICULARS	NOTE NO	DEBIT AMOUNT	CREDIT AMOUNT
	INSURANCE EXPENSE A/C     DR		$                       920.00
	TO PREPAID INSURANCE A/C			$                       920.00
DEC,31	(TO RECORD INSURANCE EXPENSES ACCOUNTED)
	SUPPLIES EXPENSE A/C     DR		$                   1,015.00
	TO SUPPLIES A/C			$                   1,015.00
DEC,31	(TO RECORD SUPPLIES USED)
	DEPRECIATION EXPENSES - BUILDING A/C     DR		$                   7,610.00
	DEPRECIATION EXPENSES - EQUIPMENT A/C     DR		$                   4,300.00
	TO ACCUMULATED DEPRECIATION - BUILDING A/C			$                   7,610.00
	TO ACCUMULATED DEPRECIATION - EQUIPMENT A/C			$                   4,300.00
DEC,31	(TO RECORD DEPRECIATION EXPENSES ACCOUNTED)
	UNEARNED RENT A/C     DR		$                   5,545.00
	TO RENT REVENUE A/C			$                   5,545.00
DEC,31	(TO RECORD RENT INCOME EARNED)
	SALARIES AND WAGES EXPENSES A/C     DR		$                   3,040.00
	TO SALARIES AND WAGES PAYABLE A/C			$                   3,040.00
DEC,31	(TO RECORD SALARIES AND WAGES ACCRUED)
	UNBILLED REVENUE A/C     DR		$                 10,865.00
	TO FEES EARNED A/C			$                 10,865.00
DEC,31	(TO RECORD FEES EARNED BUT UNBILLED)
			$                 33,295.00	$                 33,295.00

SEARS EDITING COMPANY
ADJUSTED TRIAL BALANCE
AS AT JANUARY 31,20Y1
UNADJUSTED TRIAL BALANCE	ADJUSTMENTS	ADJUSTED TRIAL BALANCE
PARTICULARS	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
CASH AT BANK	$                  7,420.00				$                          7,420.00
ACCOUNTS RECEIVABLES	$               38,115.00				$                       38,115.00
SUPPLIES	$                  1,630.00			$           1,015.00	$                             615.00
PREPAID INSURANCE	$                  7,050.00			$               920.00	$                          6,130.00
UNBILLED REVENUE			$              10,865.00		$                       10,865.00
LAND	$             114,550.00				$                     114,550.00
BUILDING	$             150,250.00				$                     150,250.00
EQUIPMENTS	$             133,200.00				$                     133,200.00
ACCUMULATED DEPRECTION - BUILDING		$                         88,800.00		$           7,610.00		$                            96,410.00
ACCUMULATED DEPRECTION - EQUIPMENT		$                         96,605.00		$           4,300.00		$                          100,905.00
ACCOUTS PAYABLE		$                         12,560.00				$                            12,560.00
UNEARNED RENT		$                           7,035.00	$                5,545.00			$                              1,490.00
SALARIES AND WAGES PAYBALE				$           3,040.00		$                              3,040.00
COMMON STOCK		$                         74,980.00				$                            74,980.00
RETAINED EARNINGS		$                       142,235.00				$                          142,235.00
DIVIDEND	$               15,055.00				$                       15,055.00
FEES EARNED		$                       327,900.00		$         10,865.00		$                          338,765.00
RENT REVENUE				$           5,545.00		$                              5,545.00
SALARIES AND WAGES EXPENSES	$             194,870.00		$                3,040.00		$                     197,910.00	$                                           -
UTILITIES EXPENSES	$               42,345.00				$                       42,345.00
ADVERTISEMENT EXPENSES	$               22,335.00				$                       22,335.00
REPAIR EXPENSES	$               17,690.00				$                       17,690.00
MISCELLANEOUS EXPENSES	$                  5,605.00				$                          5,605.00
SUPPLIES EXPENSES			$                1,015.00		$                          1,015.00
INSURANCE EXPENSES			$                    920.00		$                             920.00	ekkarill92 Next > < Previous Related Solutions Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On... Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On January 31, 20Y1, the end of the current year, Sears Editing Company’s accounting clerk prepared the following unadjusted trial balance: Sears Editing Company UNADJUSTED TRIAL BALANCE January 31, 20Y1 ACCOUNT TITLE DEBIT CREDIT 1 Cash 7,655.00 2 Accounts Receivable 38,345.00 3 Prepaid Insurance 7,075.00 4 Supplies 2,290.00 5 Land 113,500.00 6 Building 149,450.00 7 Accumulated Depreciation-Building 87,905.00 8 Equipment 133,250.00 9 Accumulated Depreciation-Equipment 96,435.00... Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On... 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