Question

	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.

Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On January 31, 20Y1, the end of the current year, Sears Editing Company’s accounting clerk prepared the following unadjusted trial balance:

Sears Editing Company

UNADJUSTED TRIAL BALANCE

January 31, 20Y1

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	7,565.00
2	Accounts Receivable	38,860.00
3	Prepaid Insurance	7,310.00
4	Supplies	2,435.00
5	Land	117,450.00
6	Building	153,100.00
7	Accumulated Depreciation-Building		87,230.00
8	Equipment	137,150.00
9	Accumulated Depreciation-Equipment		99,160.00
10	Accounts Payable		12,005.00
11	Unearned Rent		6,425.00
12	Common Stock		74,720.00
13	Retained Earnings		156,765.00
14	Dividends	14,500.00
15	Fees Earned		327,050.00
16	Salaries and Wages Expense	196,570.00
17	Utilities Expense	42,485.00
18	Advertising Expense	22,730.00
19	Repairs Expense	17,280.00
20	Miscellaneous Expense	5,920.00
21	Totals	763,355.00	763,355.00

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

a.	Unexpired insurance at January 31, $5,985.
b.	Supplies on hand at January 31, $470.
c.	Depreciation of building for the year, $7,900.
d.	Depreciation of equipment for the year, $4,590.
e.	Rent unearned at January 31, $1,560.
f.	Accrued salaries and wages at January 31, $3,085.
g.	Fees earned but unbilled on January 31, $11,010.

Answer 1

Repuirement :2

Requirement :1 Adjusting Entry:

Date	Account Name	Debit	Credit
A.	Insurance Expense	$1,325
	Prepaid Expense ( $7310 - $ 5985)		$1,325
B.	Supplies Expense	$1,965
	To Supplies ( $2435 - 470)		$1,965
C.	Depreciation Expense	$7,900
	To Accumulated Dep. - Building		$7,900
D.	Depreciation Expense	$ 4,590
	To Accumulated Dep. - Equipment		$4,590
E.	Rent Uneared Revenue ( $ 6425 - 1560)	$4,865
	To Rent Revenue		$4,865
F.	Salaries and wages expense	$3,085
	To Salaries and wages payable		$3,085
G.	Account Receivable	$ 11,010
	To Fee Earned		$ 11,010

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