Question

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	7,710.00
2	Accounts Receivable	37,935.00
3	Prepaid Insurance	7,070.00
4	Supplies	2,125.00
5	Land	108,400.00
6	Building	145,300.00
7	Accumulated Depreciation-Building		85,610.00
8	Equipment	134,800.00
9	Accumulated Depreciation-Equipment		96,100.00
10	Accounts Payable		12,625.00
11	Unearned Rent		6,340.00
12	Jan Pitman, Capital		219,690.00
13	Jan Pitman, Drawing	15,120.00
14	Fees Earned		323,700.00
15	Salaries and Wages Expense	196,770.00
16	Utilities Expense	42,265.00
17	Advertising Expense	23,135.00
18	Repairs Expense	17,195.00
19	Miscellaneous Expense	6,240.00
20	Totals	744,065.00	744,065.00

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

a.	Unexpired insurance at October 31, $6,105.
b.	Supplies on hand at October 31, $485.
c.	Depreciation of building for the year, $7,140.
d.	Depreciation of equipment for the year, $4,445.
e.	Unearned rent at October 31, $1,890.
f.	Accrued salaries and wages at October 31, $3,330.
g.	Fees earned but unbilled on October 31, $11,475.

	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 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. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 4 5 6 7 8 9 10 11 12 13 14 15 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 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. Pitman Company ADJUSTED TRIAL BALANCE October 31, 2019 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Prepaid Insurance 4 Supplies 5 Land 6 Building 7 Accumulated Depreciation-Building 8 Equipment 9 Accumulated Depreciation-Equipment 10 Accounts Payable 11 Unearned Rent 12 Salaries and Wages Payable 13 Jan Pitman, Capital 14 Jan Pitman, Drawing 15 Fees Earned 16 Rent Revenue 17 Salaries and Wages Expense 18 Utilities Expense 19 Advertising Expense 20 Repairs Expense 21 Depreciation Expense-Building 22 Depreciation Expense-Equipment 23 Insurance Expense 24 Supplies Expense 25 Miscellaneous Expense 26 Totals

Answer 1

Adjusting Entries

Particulars	Debit	Credit
1) Prepaid Insurance at 31/10 - 6105
Insurance Expenses	965
Prepaid Insurance		965
2) Supplies on Hand at 31/10 - 485
Supplies Expense	1640
Supplies		1640
3)Depreciation on Building - 7140
Depreciation Expense-Building	7140
Accumulated Depreciation-Building		7140
4)Depreciation on equipment - 4445
Depreciation Expense-Equipment	4445
Accumulated Depreciation-Equipment		4445
5)Unearned Rent at 31/10 - 1890
Unearned Rent	4450
Rent Revenue		4450
6)Accrued Salaries at 31/10 - 3330
Salaries and Wages Expense	3330
Salaries and Wages Payable		3330
7)Fees earned but unbilled- 11475
Accounts Receivable	11475
Fees Earned		11475

Adjusted Trial Balance as at October, 31, 2019

Particulars	Debit	Credit
Cash	7710
Accounts Receivable(37935+11475)	49410
Prepaid Insurance(7070-965)	6105
Supplies(2125-1640)	485
Land	108400
Building	145300
Accumulated Dep - Building(85610+7140)		92750
Equipment	134800
Accumulated Dep - Equipment(96100+4445)		100545
Accounts Payable		12625
Unearned Rent(6340-4450)		1890
Salaries and Wages Payable		3330
Jan Pitman, Capital		219690
Jan Pitman, Drawing	15120
Fees Earned(323700+11475)		335175
Rent Revenue		4450
Salaries and Wages Expense(196770+3330)	200100
Utilities Expense	42265
Advertising Expense	23135
Repairs Expense	17195
Depreciation Expense - Building	7140
Depreciation Expense - Equipment	4445
Insurance Expense	965
Supplies Expense	1640
Miscellaneous Expense	6240
Total	770455	770455