In: Accounting
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 ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pitman Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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: 158/176
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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Transaction | Account Description | Debit | Credit |
a | Insurance Expense | 6,600.00 | |
Prepaid Insurance | |||
(Being Prepaid Insurance amottized) | |||
b | Supplies Expense | 1,305.00 | |
Supplies | 1,305.00 | ||
(Being Supplies Consumed Recorded) | |||
c | Depreciation Expense—Building | 12,000.00 | |
Accumulated depreciation | 12,000.00 | ||
(Being Depreciation on Building Recorded) | |||
d | Depreciation Expense—Equipment | 8,600.00 | |
Accumulated depreciation | 8,600.00 | ||
(Being Depreciation on equipment Recorded) | |||
e | Unearned Rent | 4,500.00 | |
Rent Revenue | 4,500.00 | ||
(Being Rent Revenue Recorded) | |||
f | Salaries and Wages Expense | 2,800.00 | |
Salaries and Wages Payable | 2,800.00 | ||
(Being Expenses Accrued) | |||
g | Accounts Receivable | 10,050.00 | |
Fees Earned | 10,050.00 | ||
(Being Revenue Earned Recorded) |
Adjusted Trial Balance | ||
ACCOUNT TITLE | DEBIT | CREDIT |
Cash | $ 7,500 | $ - |
Accounts Receivable | $ 48,450 | $ - |
Prepaid Insurance | $ 600 | $ - |
Supplies | $ 675 | $ - |
Land | $ 112,500 | $ - |
Building | $ 300,250 | $ - |
Accumulated Depreciation-Building | $ - | $ 99,550 |
Equipment | $ 135,300 | $ - |
Accumulated Depreciation-Equipment | $ - | $ 106,550 |
Accounts Payable | $ - | $ 12,150 |
Unearned Rent | $ - | $ 2,250 |
Jan Pitman, Capital | $ - | $ 371,000 |
Jan Pitman, Drawing | $ 15,000 | $ - |
Salaries and Wages Payable | $ - | $ 2,800 |
Fees Earned | $ - | $ 334,650 |
Rent Revenue | $ - | $ 4,500 |
Salaries and Wages Expense | $ 196,170 | $ - |
Utilities Expense | $ 42,375 | $ - |
Advertising Expense | $ 22,800 | $ - |
Repairs Expense | $ 17,250 | $ - |
Insurance Expense | $ 6,600 | $ - |
Supplies Expesnes | $ 1,305 | $ - |
Depreciation Expense—Building | $ 12,000 | $ - |
Depreciation Expense-Equipment | $ 8,600 | $ - |
Miscellaneous Expense | $ 6,075 | $ - |
Totals | $ 933,450 | $ 933,450 |
Trial Balance | ||||||
Unadjusted | Adjustment | Adjusted | ||||
ACCOUNT TITLE | DEBIT | CREDIT | DEBIT | CREDIT | DEBIT | CREDIT |
Cash | $ 7,500 | $ 7,500 | $ - | |||
Accounts Receivable | $ 38,400 | $ 10,050 | $ 48,450 | $ - | ||
Prepaid Insurance | $ 7,200 | $ (6,600) | $ 600 | $ - | ||
Supplies | $ 1,980 | $ (1,305) | $ 675 | $ - | ||
Land | $ 112,500 | $ 112,500 | $ - | |||
Building | $ 300,250 | $ 300,250 | $ - | |||
Accumulated Depreciation-Building | $ 87,550 | $ 12,000 | $ - | $ 99,550 | ||
Equipment | $ 135,300 | $ 135,300 | $ - | |||
Accumulated Depreciation-Equipment | $ 97,950 | $ 8,600 | $ - | $ 106,550 | ||
Accounts Payable | $ 12,150 | $ - | $ 12,150 | |||
Unearned Rent | $ 6,750 | $ (4,500) | $ - | $ 2,250 | ||
Jan Pitman, Capital | $ 371,000 | $ - | $ 371,000 | |||
Jan Pitman, Drawing | $ 15,000 | $ 15,000 | $ - | |||
Salaries and Wages Payable | $ 2,800 | $ - | $ 2,800 | |||
Fees Earned | $ 324,600 | $ 10,050 | $ - | $ 334,650 | ||
Rent Revenue | $ 4,500 | $ - | $ 4,500 | |||
Salaries and Wages Expense | $ 193,370 | $ 2,800 | $ 196,170 | $ - | ||
Utilities Expense | $ 42,375 | $ 42,375 | $ - | |||
Advertising Expense | $ 22,800 | $ 22,800 | $ - | |||
Repairs Expense | $ 17,250 | $ 17,250 | $ - | |||
Insurance Expense | $ - | $ 6,600 | $ 6,600 | $ - | ||
Supplies Expesnes | $ 1,305 | $ 1,305 | $ - | |||
Depreciation Expense—Building | $ 12,000 | $ 12,000 | $ - | |||
Depreciation Expense-Equipment | $ 8,600 | $ 8,600 | $ - | |||
Miscellaneous Expense | $ 6,075 | $ 6,075 | $ - | |||
Totals | $ 900,000 | $ 900,000 | $ 33,450 | $ 33,450 | $ 933,450 | $ 933,450 |
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