Question

Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services’ accounting clerk prepared the following unadjusted trial balance at July 31, 2018:

Reece Financial Services Co.
Unadjusted Trial Balance
July 31, 2018
	Debit Balances		Credit Balances
Cash	10,200
Accounts Receivable	34,750
Prepaid Insurance	6,000
Supplies	1,725
Land	50,000
Building	155,750
Accumulated Depreciation—Building			62,850
Equipment	45,000
Accumulated Depreciation—Equipment			17,650
Accounts Payable			3,750
Unearned Rent			3,600
Common Stock			60,000
Retained Earnings			93,550
Dividends	8,000
Fees Earned			158,600
Salaries and Wages Expense	56,850
Utilities Expense	14,100
Advertising Expense	7,500
Repairs Expense	6,100
Miscellaneous Expense	4,025
	400,000		400,000

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

Required:

Depreciation of building for the year, $6,400.

Depreciation of equipment for the year, $2,800.

Accrued salaries and wages at July 31, $900.

Unexpired insurance at July 31, $1,500.

Fees earned but unbilled on July 31, $10,200.

Supplies on hand at July 31, $615.

Rent unearned at July 31, $300.

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.

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

Answer 1

Adjusting entry :

Date	accounts & explantion	debit	credit
	Depreciation expenses-building	6400
	Accumlated depreciation-building		6400
	Depreciation expenses-equipement	2800
	Accumlated depreciation-equipment		2800
	Salary and Wages expenses	900
	Ssalary and Wages payable		900
	Insurance expenses	4500
	Prepaid insurance		4500
	Account receivable	10200
	service revenue		10200
	Supplies expenses	1110
	Supplies		1110
	Unearned rent	3300
	Rent revenue		3300

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance

Account title	Debit	credit
Cash	10200
Account receivable	44950
Prepaid insurance	1500
Supplies	615
Land	50000
Building	155750
Accumlated depreciation-Building		69250
Equipment	45000
Accumlated depreciation-equipment		20450
Account payable		3750
Unearned rent		300
Salaries and wages payable		900
Common stock		60000
Retained earning		93550
Dividend	8000
Fees earned		168800
Rent revenue		3300
Salaries and wages expenses	57750
Utitlies exp	14100
Advertising exp	7500
repairs exp	6100
Miscellaneous exp	4025
Depreciation exp-building	6400
Depreciation exp-equipment	2800
Insurnace exp	4500
Supplies exp	1110
TOTAL	420300	420300