Question

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Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October...

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
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: 158/176

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

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Adjusting Entries

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Solutions

Expert Solution

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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