Refer to the information provided for Lewis and Associates in Problem 4-9A.

Data from 4-9A

Lewis and Associates has been in the termite inspection and treatment business for five years. An unadjusted trial balance at June 30, 2014, follows.

The following additional information is available:
a. Lewis rents a warehouse with office space and prepays the annual rent of $4,800 on May 1 of each year.
b. The asset account Equipment represents the cost of treatment equipment, which has an estimated useful life of ten years and an estimated salvage value of $200.
c. Chemical inventory on hand equals $1,300.
d. Wages and salaries owed but unpaid to employees at the end of the month amount to $1,080.
e. Lewis accrues income taxes using an estimated tax rate equal to 30% of the income for the month.

Required
Prepare a table to summarize the required adjusting entries as they affect the accounting equation. Use the format in Exhibit 3-1 on page 109. Identify each adjustment by letter.

Transcribed Image Text:

Lewis and Associates Unadjusted Trial Balance June 30, 2014 Debit Credit $ 6,200 Cash Accounts Receivable 10,400 Prepaid Rent Chemical Inventory 4,400 9,400 Equipment Accumulated Depreciation Accounts Payable Capital Stock Retained Earnings 18,200 $ 1,050 1,180 5,000 25,370 40,600 Treatment Revenue Wages and Salary Expense Utilities Expense Advertising Expense 22,500 1,240 860 Totals $73,200 $73,200