Question

Question provided us with Adjusted, Unadjusted and Post-closing trial balance sheets. With this information listed below please fill in:

• General Journal (10 transactions)
• Income Statement
• St Owner Equity
• Balance Sheet
• Work Sheet

The Mobility Solutions Company began operations on December 1, 2019. The unadjusted trial balance of the Mobility Solutions Company as of December 31, 2019 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Mobility Solutions Company found in chapter 3.

1. 1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2019. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.

2. 2) Based on a physical count, supplies on hand total $4,650. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.

3. 3) The equipment is expected to have a 4-year useful life, and be worth about $10,000 at the end of four years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry, if any.

4. 4) On December 26, the client paid a $9,000 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. 5) Mobility Solutions's sole employee earns $160 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 payable, and prepare the necessary adjusting entry, if any.

6. 6) In the second week of December, Mobility Solutions agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $3,900. The terms of the initial agreement call for Mobility Solutions to provide services from December 12, 2019, through January 10, 2020, or 30 days of service. The club agrees to pay Mobility Solutions $3,900 on January 10, 2020, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.

Prepare the required adjusting and closing entries for the Mobility Solutions Company.

• 1 The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2019. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.

• 2Based on a physical count, supplies on hand total $4,650. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.

• 3The equipment is expected to have a 4-year useful life, and be worth about $10,000 at the end of four years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry, if any.

• 4On December 26, the client paid a $9,000 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.

• 5Mobility Solutions's sole employee earns $160 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 payable, and prepare the necessary adjusting entry, if any.

• 6In the second week of December, Mobility Solutions agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $3,900. The terms of the initial agreement call for Mobility Solutions to provide services from December 12, 2019, through January 10, 2020, or 30 days of service. The club agrees to pay Mobility Solutions $3,900 on January 10, 2020, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.

• 7Prepare the journal entry necessary to close the revenue account(s).

• 8Prepare the journal entry necessary to close the expense account(s).

• 9Prepare the journal entry to close Income Summary.

• 10Prepare the journal entry to close R. Walsh, Withdrawals.

Unadjusted

Mobility Solutions
Trial Balance
December 31, 2017
Account Title	Debit	Credit
Cash	23,505
Supplies	6,200
Prepaid insurance	2,400
Equipment	34,000
Accounts payable		8,200
Unearned consulting revenue		9,000
R. Walsh, Capital		46,000
R. Walsh, Withdrawals	900
Consulting revenue		8,500
Rental revenue		450
Salaries expense	2,720
Rent expense	2,100
Utilities expense	325
Total	72,150	72,150

Post-closing

Mobility Solutions
Trial Balance
December 31, 2019
Account Title	Debit	Credit
Cash	23,505
Accounts receivable	2,600
Supplies	4,650
Prepaid insurance	2,400
Equipment	34,000
Accumulated depreciation - Equipment		500
Accounts payable		8,200
Salaries payable		480
Unearned consulting revenue		8,250
R. Walsh, Capital		46,000
R. Walsh, Withdrawals	900
Consulting revenue		3,650
Rental revenue		450
Depreciation expense	500
Salaries expense	3,200
Rent expense	2,100
Supplies expense	1,550
Utilities expense	325
Total	75,730	67,530

Answer 1

General Journal

Date	Account Description	Ref	Debit ($)	Credit ($)
Dec.31	Insurance Expenses		100
	Prepaid Expenses			100
	( to record insurance expense expire)
Dec.31	Supplies Expenses		1550
	Supplies			1550
	( To adjust Supply Expenses )
Dec.31	Deprecition Expenses		500
	Accumulated Depreciation			500
	( To adjust deprecition expenses Incurred)
Dec.31	Unearned Consulting Revenue		750
	Consulting Revenue			750
	( to Adjust Consulting revenue Earned)
Dec.31	Salary Expenses		480
	Salaries Payable			480
	( to adjusted Salaries expenses due)
Dec.31	Accounts Receivable		2600
	Consulting Revenue			2600
	( To Record Consulting Revenue Earned)

Note 1:- Insurance Expenses for december = 2400/24 Month = 100 per month

Note 2:- Supplie Expenses = Opening Supplies - Ending Supplies= 6200 - 4650 =1550

Note 3:- Depreciation Expenses December:-

=[ (Equipment Value - Salvage Value) / Useful Life] /12

= [(34000-10000)/4]/12 = (24000/4)/12 = 500

Note 4:- Consulting Revenue(Dec 27 to Dec 31) = (9000 / 60 Days) x 5 Days = 750

Note 5:- Salaries Payable(Dec.29/Dec.30/Dec.31) =160 x 3= 480

Note 6:- Consulting Revenue( Dec12 to Dec31) = ( 3900 /30) x 20=2600

Mobility Sulution Company

Adjusted Trial Balance

As on Dec 31,2019.

Unajusted Trail Balance				Adjustments			Adjusted Trail Balance
	Debit ($)	Credit ($)		Debit ($)	Credit ($)		Debit ($)	Credit ($)
Cash	23,505						23505
Supplies	6,200				1550		4650
Prepaid insurance	2,400				100		2300
Equipment	34,000						34000
Accounts Receivable				2600			2600
Accounts payable		8,200						8200
Salary Payable					480			480
Unearned consulting revenue		9,000		750				8250
Accumulated Depreciation- Equipment					500			500
R. Walsh, Capital		46,000						46000
R. Walsh, Withdrawals	900						900
Consulting revenue		8,500			3350			11850
Rental revenue		450						450
Salaries expense	2,720			480			3200
Rent expense	2,100						2100
Utilities expense	325						325
Insurance Expenses				100			100
Supplies Expenses				1550			1550
Depreciation Expenses				500			500
	72,150	72,150		5980	5980		75730	75730

Mobility Sulution Company

Income Statement

As on Dec 31,2019.

Details.	Amount ($)
Revenue
Consulting revenue	11850
Rental revenue	450
Total Revenue	12300
Expenses:
Salaries expense	3200
Rent expense	2100
Utilities expense	325
Insurance Expenses	100
Supplies Expenses	1550
Depreciation Expenses	500
Total Expenses	7775
Net Income	4525

Mobility Sulution Company

Statement of Owner's Equity

As on Dec 31,2019.

Description	Amount($)
R. Walsh Capital	46000
Less:- Withdrawal	900
	45100
Add:-Net Income	4525
Total owner's Equity	49625

Mobility Sulution Company

Balance Sheet

As on Dec 31,2019.

Desription	Amounts ($)
Assets
Cash	23505
Supplies	4650
Prepaid insurance	2300
Equipment	34000
Accounts Receivable	2600
Total Assets	67055
Liabilities:-
Accounts payable	8200
Salary Payable	480
Unearned consulting revenue	8250
Accumulated Depreciation- Equipment	500
R. Walsh Capital- Owner's Equity	49625
Total Liability	67055

Mobility Sulution Company

Closing Entry

As on Dec 31,2019.

Date	Desription	Ref	Debit ($)	Credit ($)
Dec.31	Consulting revenue		11850
	Rental revenue		450
	Income Summary			12300
	( to Close Revenue Accounts)
Dec.31	Income Summary		7775
	Salaries expense			3200
	Rent expense			2100
	Utilities expense			325
	Insurance Expenses			100
	Supplies Expenses			1550
	Depreciation Expenses			500
	(To Close Expenses Account)
Dec-31	Income Summary		4525
	Owner's Capital			4525
	(To Close Net Revenue)
Dec-31	Owner's Capital		900
	Owner's Drawings			900
	(To Close Ower's Drawings)