Question

The account balances appearing on the trial balance were taken from the general ledger of Ahmed's Copy Shop at October 31. Additional information for the month of October which has not yet been recorded in the accounts is as follows:

(a) A physical count of supplies indicates $300 on hand at October 31.

(b) The amount of insurance that expired in the month of October was $200.

(c) Depreciation on equipment for October was $400.

(d) Rent owed on the copy shop for the month of October was $600 but will not be paid until November.

Account title	Trial Balance
	Debit	Credit
Cash	1,000
Supplies	1,100
Prepaid insurance	2,200
Equipment	24,000
Accumulated Depreciation		4,500
Accounts payable		2,400
Notes payable		4,000
Ahmed’s capital		15,300
Ahmed’s drawings	2,400
Copy revenue		4,900
Utilities expense	400
Total	31,100	31,100

Required:

(a) Prepare the adjusting entries required at October 31 for the transactions above.

(b) Prepare the adjusted trial balance for the month ended October 31.

The account balances appearing on the trial balance were taken from the general ledger of Ahmed's Copy Shop at October 31. Additional information for the month of October which has not yet been recorded in the accounts is as follows:

(a) A physical count of supplies indicates $300 on hand at October 31.

(b) The amount of insurance that expired in the month of October was $200.

(c) Depreciation on equipment for October was $400.

(d) Rent owed on the copy shop for the month of October was $600 but will not be paid until November.

Account title	Trial Balance
	Debit	Credit
Cash	1,000
Supplies	1,100
Prepaid insurance	2,200
Equipment	24,000
Accumulated Depreciation		4,500
Accounts payable		2,400
Notes payable		4,000
Ahmed’s capital		15,300
Ahmed’s drawings	2,400
Copy revenue		4,900
Utilities expense	400
Total	31,100	31,100

Required:

(a) Prepare the adjusting entries required at October 31 for the transactions above.

(b) Prepare the adjusted trial balance for the month ended October 31.

Answer 1

a) Adjusting entries

Date	Title	Debit	Credit
a	Supplies expense ($1,100-$300)	$    800
	Supplies		$     800
	(To record supplies expenses)
b	Insurance expense	$    200
	Prepaid insurance		$     200
	(To record insurance expired)
c	Depreciation expense	$    400
	Accumulated depreciation		$     400
	(To record depreciation expense)
d	Rent expenses	$    600
	Accounts payable		$     600
	(To record accrued rent expense)

b) Adjusted trial balance

Account title	Debit	Credit
Cash	$    1,000
Supplies	$        300
Prepaid insurance	$    2,000
Equipment	$ 24,000
Accumulated depreciation		$    4,900
Accounts payable		$    3,000
Notes payable		$    4,000
Ahmad's capital		$ 15,300
Ahmad's drawings	$    2,400
Copy revenue		$    4,900
Utilities expense	$        400
Depreciation expense	$        400
Rent expense	$        600
Insurance expense	$        200
Supplies expense	$        800
Total	$ 32,100	$ 32,100

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