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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Adjusting Entries |
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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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