Electro Repairs & Service
Unadjusted Trial Balance
June 30, 2014
Debit
Balances
Credit
Balances
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,800
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,600
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,800
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000
Unearned Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000
Amy Wolf, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,000
Amy Wolf, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Fees Earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393,000
Wages Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,000
Rent Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,000
Utilities Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,000
Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,800
600,000 600,000
For preparing the adjusting entries, the following data were assembled:
a. Fees earned but unbilled on June 30 were $12,700.
b. Supplies on hand on June 30 were $4,175.
c. Depreciation of equipment was estimated to be $7,400 for the year.
d. The balance in unearned fees represented the June 1 receipt in advance for services to be provided. Only $14,200 of the services was provided between June 1 and June 30.
e. Unpaid wages accrued on June 30 were $1,100.
Instructions
1. Journalize the adjusting entries necessary on June 30, 2014.
2. Determine the revenues, expenses, and net income of Electro Service & Repairs before the adjusting entries.
3. Determine the revenues, expense, and net income of Electro Service & Repairs after the adjusting entries.
4. Determine the effect of the adjusting entries on Amy Wolf, Capital.
Answer:
1. a. Accounts Receivable 12,700
Fees Earned 12,700
Accrued fees earned.
b. Supplies Expense 17,425
Supplies 17,425
Supplies used ($21,600 – $4,175).
c. Depreciation Expense 7,400
Accumulated Depreciation—Equipment 7,400
Equipment depreciation.
d. Unearned Fees 14,200
Fees Earned 14,200
Fees earned.
e. Wages Expense 1,100
Wages Payable 1,100
Accrued wages.
2. Revenues…………………… $393,000
Expenses…………………… 301,800 ($126,000 + $96,000 + $69,000 + $10,800)
Net Income………………… $ 91,200
3. Revenues…………………… $419,900 ($393,000 + $12,700 + $14,200)
Expenses…………………… 327,725 ($301,800 + $17,425 + $7,400 + $1,100)
Net Income…………………… $ 92,175
4. The effect of the adjusting entries on Amy Wolf, Capital is the difference in net
income in (2) and (3) of $975 ($92,175 – $91,200), which increases Amy Wolf, Capital.