Reece Financial Services Co.
Unadjusted Trial Balance
July 31, 2014
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
Joni Reece, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,550
Joni Reece, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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:
a. Depreciation of building for the year, $6,400.
b. Depreciation of equipment for the year, $2,800.
c. Accrued salaries and wages at July 31, $900.
d. Unexpired insurance at July 31, $1,500.
e. Fees earned but unbilled on July 31, $10,200.
f. Supplies on hand at July 31, $615.
g. Rent unearned at July 31, $300.
Instructions
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.
Answer:
1. a Depreciation Expense—Building 6,400
Accumulated Depreciation—Building 6,400
Building depreciation.
b.
Depreciation Expense—Equipment 2,800
Accumulated Depreciation—Equipment 2,800
Equipment depreciation.
c.
Salaries and Wages Expense 900
Salaries and Wages Payable 900
Accrued salaries and wages.
d.
Insurance Expense 4,500
Prepaid Insurance 4,500
Insurance expired ($6,000 – $1,500).
e.
Accounts Receivable 10,200
Fees Earned 10,200
Accrued fees earned.
f.
Supplies Expense 1,110
Supplies 1,110
Supplies used ($1,725 – $615).
g.
Unearned Rent 3,300
Rent Revenue 3,300
Rent revenue earned ($3,600 – $300).
2.
REECE FINANCIAL SERVICES CO.
Adjusted Trial Balance
July 31, 2014
Debit
Balances
Credit
Balances
Cash 10,200
Accounts Receivable 44,950
Prepaid Insurance 1,500
Supplies 615
Land 50,000
Building 155,750
Accumulated Depreciation—Building 69,250
Equipment 45,000
Accumulated Depreciation—Equipment 20,450
Accounts Payable 3,750
Unearned Rent 300
Salaries and Wages Payable 900
Joni Reece, Capital 153,550
Joni Reece, Drawing 8,000
Fees Earned 168,800
Rent Revenue 3,300
Salaries and Wages Expense 57,750
Utilities Expense 14,100
Advertising Expense 7,500
Depreciation Expense—Building 6,400
Repairs Expense 6,100
Insurance Expense 4,500
Depreciation Expense—Equipment 2,800
Supplies Expense 1,110
Miscellaneous Expense 4,025
420,300 420,300