Question: Magic Cleaning Services (MCS) has a fiscal year- end of December 31. As of year- end, MCS has the following unadjusted trial balance: In addition,
Magic Cleaning Services (MCS) has a fiscal year- end of December 31. As of year- end, MCS has the following unadjusted trial balance:
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In addition, it has not adjusted for the following transactions:
€¢ All of the prepaid rent expired by the end of the year.
€¢ The building was purchased early this year and has a 30- year life with no residual value.
Depreciation is to be recorded for a full year on a straight- line basis.
€¢ The company provided a portion of the services related to an advance collection on December 20. It earned half of the unearned service revenue account balance in the current year.
€¢ Wages for the current year in the amount of $ 24,000 should be accrued and are set to be paid out to workers in January.
Required
a. Journalize necessary adjusting journal entries.
b. Prepare an adjusted trial balance as of December 31, 2015.
Magic Cleaning Services Unadjusted Trial Balance At December 31 Account Cash Accounts Recervable Supplies Prepaid Rent Building Accounts Payable Unearned Service Revenue Common Stock Retained Earnings Service Revenue Waga Expense Utilities Expense Administrative Expense Debit Credit $430,900 159,000 111,000 2,400 90,000 45,900 98,000 100,000 619,200 48,600 6,200 16,000 Totals $863.100 863.100
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a ACCOUNT DEBIT CREDIT Rent Expense 2400 Prepaid Rent 2400 ACCOUNT DEBIT CREDIT Depreciation ExpenseBuilding 9000030 years 3000 Accumulated DepreciationBuilding 3000 ACCOUNT DEBIT CREDIT Unearned Service Revenue 49000 Service Revenue 49000 ACCOUNT DEBIT CREDIT Wage Expense 24000 Wages Payable 24000 b To prepare the adjusted trial balance post adjusting entries to taccounts to obtain adjusted balances Cash Accounts Receivable Balance 430900 Balance 158000 Supplies Prepaid Rent Balance 111000 Balance 2400 2400 Adjustment Adj Balance 0 Building Accumulated DepreciationBuildings Balance 90000 3000 Adjustment 3000 Adj Balance Accounts Payable Unearned Service Revenue 45900 Balance 98000 Balance Adjustment 49000 49000 Adj Balance Wages Payable 24000 Adjustment 24000 Balance Common Stock Retained Earnings 100000 Balance Service Revenue Wage Expense 619200 Balance Balance 48600 49000 Adjustment Adjustment 24000 668200 Adj Balance Adj Balance 72600 Utilities Expense Administrative Expense Balance 6200 Balance 16000 Rent Expense Depreciation Expense ... View full answer
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