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	7,655.00
2	Accounts Receivable	38,345.00
3	Prepaid Insurance	7,075.00
4	Supplies	2,290.00
5	Land	113,500.00
6	Building	149,450.00
7	Accumulated Depreciation-Building		87,905.00
8	Equipment	133,250.00
9	Accumulated Depreciation-Equipment		96,435.00
10	Accounts Payable		11,860.00
11	Unearned Rent		6,705.00
12	Common Stock		74,530.00
13	Retained Earnings		146,290.00
14	Dividends	14,690.00
15	Fees Earned		328,600.00
16	Salaries and Wages Expense	198,220.00
17	Utilities Expense	42,120.00
18	Advertising Expense	22,315.00
19	Repairs Expense	17,210.00
20	Miscellaneous Expense	6,205.00
21	Totals	752,325.00	752,325.00

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

a.	Unexpired insurance at August 31, $5,860.
b.	Supplies on hand at August 31, $545.
c.	Depreciation of building for the year, $7,985.
d.	Depreciation of equipment for the year, $4,080.
e.	Rent unearned at August 31, $1,145.
f.	Accrued salaries and wages at August 31, $3,490.
g.	Fees earned but unbilled on August 31, $11,640.

	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

Books of Rowland Company

Journal Entires

Insurance Expense A/c Dr 1,215

To Prepaid Insurance 1,215

(Being insurance expense recorded)

Supplies Expense   A/c Dr 1,745

To Supplies A/c 1,745

(Being supplies consumed during the period recorded)

Depreciation Expense—Building A/c Dr 7,985

To Accumulated Depreciation-Building A/c $7,985

(Being Depreciation provided for on Building)

Depreciation Expense—Equipment A/c Dr 4,080

To Accumulated Depreciation-Equipment 4,080

(Being Depreciation provided for on Equipment)

Rent Unearned A/c Dr 5,560

To Rent Revenue A/c 5,560

(Being Income recorded.

Salaries and Wages Expense A/c Dr 3,490

To Salaries and Wages Payable A/c 3,490

(Being salaries accrued provided for)

Accounts Receivale A/c Dr 11,640

To Fees Earned A/c 11,640

(Being entry made for fees earned but unbilled)

Rowland Company

UNADJUSTED TRIAL BALANCE

August 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,655.00
2	Accounts Receivable	49,985.00
3	Prepaid Insurance	5,860.00
4	Supplies	545.00
5	Land	113,500.00
6	Building	149,450.00
7	Accumulated Depreciation-Building		95,890.00
8	Equipment	133,250.00
9	Accumulated Depreciation-Equipment		100,515.00
10	Accounts Payable		11,860.00
11	Unearned Rent		1,145.00
12	Common Stock		74,530.00
13	Retained Earnings		146,290.00
14	Dividends	14,690.00
15	Fees Earned		340,240.00
16	Salaries and Wages Expense	201,710.00
17	Utilities Expense	42,120.00
18	Advertising Expense	22,315.00
19	Repairs Expense	17,210.00
20	Miscellaneous Expense	6,205.00
21	Insurance Expense	1,215.00
22	Supplies Expense	1,745.00
23	Depreciation Expense—Building	7,985.00
24	Depreciation Expense—Equipment	4,080.00
25	Rent Revenue		5,560
26	Salaries and Wages Payable		3,490
27	TOTALS	779,520	779,520