Question

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019 the end of the current year, Pitman Company’s accounting clerk prepared the following unadjusted trial balance:

Pitman Company

UNADJUSTED TRIAL BALANCE

October 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,500.00
2	Accounts Receivable	38,400.00
3	Prepaid Insurance	7,200.00
4	Supplies	1,980.00
5	Land	112,500.00
6	Building	300,250.00
7	Accumulated Depreciation-Building		87,550.00
8	Equipment	135,300.00
9	Accumulated Depreciation-Equipment		97,950.00
10	Accounts Payable		12,150.00
11	Unearned Rent		6,750.00
12	Jan Pitman, Capital		371,000.00
13	Jan Pitman, Drawing	15,000.00
14	Fees Earned		324,600.00
15	Salaries and Wages Expense	193,370.00
16	Utilities Expense	42,375.00
17	Advertising Expense	22,800.00
18	Repairs Expense	17,250.00
19	Miscellaneous Expense	6,075.00
20	Totals	900,000.00	900,000.00

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

a.	Unexpired insurance at October 31, $600.
b.	Supplies on hand at October 31, $675.
c.	Depreciation of building for the year, $12,000.
d.	Depreciation of equipment for the year, $8,600.
e.	Unearned rent at October 31, $2,250.
f.	Accrued salaries and wages at October 31, $2,800.
g.	Fees earned but unbilled on October 31, $10,050.

	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.

CHART OF ACCOUNTSPitman CompanyGeneral Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Prepaid Insurance
14	Supplies
15	Land
16	Building
17	Accumulated Depreciation-Building
18	Equipment
19	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Unearned Rent
23	Salaries and Wages Payable

	EQUITY
31	Jan Pitman, Capital
32	Jan Pitman, Drawing

	REVENUE
41	Fees Earned
42	Rent Revenue

	EXPENSES
51	Salaries and Wages Expense
52	Utilities Expense
53	Advertising Expense
54	Repairs Expense
55	Depreciation Expense-Building
56	Depreciation Expense-Equipment
57	Insurance Expense
58	Supplies Expense
59	Miscellaneous Expense

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.

How does grading work?

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 164/176

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2	?	?
3		?
4	?	?		?
5		?			?
6	?	?		?
7		?			?
8	?	?		?
9		?			?
10	?	?
11		?
12	?	?		?
13		?			?
14	?	?		?
15		?			?

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

Question not attempted.

Pitman Company

ADJUSTED TRIAL BALANCE

Score: 0/103

October 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Prepaid Insurance
4	Supplies
5	Land
6	Building
7	Accumulated Depreciation-Building
8	Equipment
9	Accumulated Depreciation-Equipment
10	Accounts Payable
11	Unearned Rent
12	Salaries and Wages Payable
13	Jan Pitman, Capital
14	Jan Pitman, Drawing
15	Fees Earned
16	Rent Revenue
17	Salaries and Wages Expense
18	Utilities Expense
19	Advertising Expense
20	Repairs Expense
21	Depreciation Expense-Building
22	Depreciation Expense-Equipment
23	Insurance Expense
24	Supplies Expense
25	Miscellaneous Expense
26	Totals

Answer 1

	Adjusting Entries
	Accounts title and explanation					Debit $	Credit
a.	Insurance expense Account Dr.					6600
	Prepaid insurance						6600
b.	Supplies expense Dr.					1305.00
	Supplies						1305
c.	Depreciation expense Account Dr.					12000.00
	Accumulated depreciation-Building						12000
d.	Depreciation expense Account Dr.					8600
	Accumulated depreciation-Equipment						8600
e.	Unearned rent account dr.					4500
	Rent revenue						4500
f.	Wages and salaries expense Account Dr.					2800
	Wages and salaries payable account						2800
g.	Accounts receivable Account Dr.					10050
	Fees earned Account						10050
TRIAL BALANCE				Debit	Credit
Cash				7500
Accounts receivable				48450
Prepaid insurance				600
Supplies				675
Land				112500
Building				300250
Accumulated dep-Building					99550
Equipment				135300
Accumulated dep-Equipment					106550
Accounts payable					12150
Unearned rent					2250
Wages and salaries payable					2800
Jan Pitman, Capital					371000
\Jan Pitman, Withdrawals				15000
Fees earned					334650
Rent revenue					4500
salaries and wages expense				196170
Utilities expense				42375
Advertisement				22800
Repairs				17250
Misc expense				6075
Supplies expense				1305
Insurance expense				6600
Depreciation expense-Building				12000
Depreciation expense-Equipment				8600
TOTAL				933450	933450