Question

Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2018, the end of the current year, Rowland Company’s accounting clerk prepared the following unadjusted trial balance:

Rowland Company

UNADJUSTED TRIAL BALANCE

August 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,755.00
2	Accounts Receivable	38,655.00
3	Prepaid Insurance	7,380.00
4	Supplies	2,065.00
5	Land	111,050.00
6	Building	153,300.00
7	Accumulated Depreciation-Building		86,065.00
8	Equipment	140,000.00
9	Accumulated Depreciation-Equipment		97,335.00
10	Accounts Payable		12,090.00
11	Unearned Rent		6,385.00
12	Common Stock		75,410.00
13	Retained Earnings		155,595.00
14	Dividends	14,910.00
15	Fees Earned		327,650.00
16	Salaries and Wages Expense	197,220.00
17	Utilities Expense	42,205.00
18	Advertising Expense	22,795.00
19	Repairs Expense	16,910.00
20	Miscellaneous Expense	6,285.00
21	Totals	760,530.00	760,530.00

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

a.	Unexpired insurance at August 31, $6,015.
b.	Supplies on hand at August 31, $400.
c.	Depreciation of building for the year, $7,740.
d.	Depreciation of equipment for the year, $3,835.
e.	Rent unearned at August 31, $1,625.
f.	Accrued salaries and wages at August 31, $2,720.
g.	Fees earned but unbilled on August 31, $11,520.

	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.

Answer 1

Journal entries:
Insurance expense Dr.				1365
Prepaid insurance					1365
Supplies expense Dr.				1665
Supplies					1665
Depreciation expense Dr.				7740
Accumulated depreciation-Building					7740
Depreciation expense Dr.				3835
Accumulated equipment					3835
Unearned rent Dr.				4760
Rent revenue					4760
Salaries and wages expense Dr.				2720
Salaries and wages payable					2720
Accounts receivable Dr.				11520
Fees earned					11520
ADJUSTED TRIAL BALANCE
31-Aug-18
						Debit $	Credit $
Cash						7755
Accounts Receivable						50175
Prepaid Insurance						6015
Supplies						400
Land						111050
Building						153300
Accumulated Depreciation							93805
Equipment						140000
Acumulated depreciation							101170
Accounts Payable							12090
Salary Payable							2720
Unearned rent revenue							1625
Common Stock							75410
Retained earnings							155595
Dividend						14910
Fees earned							339170
Rent revenue							4760
Salaries and wages						199940
Supplies expense						1665
Depreciation Building						7740
Depreciation Equipmet						3835
Insurance						1365
utilities expense						42205
Advertising expense						22795
Repairs expense						16910
Miscelleneous expense						6285
				TOTAL		786345	786345