Miller Realty's unadjusted trial balance on December 31, 1990, the end of its annual accounting period, is
Question:
Miller Realty's unadjusted trial balance on December 31, 1990, the end of its annual accounting period, is as follows:
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1. Set up accounts for the items in the trial balance plus these additional accounts: Accounts Receivable; Office Salaries Payable; Management Fees Earned; Insurance Expense; Office Supplies Expense; Depreciation Expense, Office Equipment; and Depreciation Expense, Automobile. Enter the trial balance amounts in the accounts.
2. Use the information that follows to prepare and post adjusting entries:
a. An examination of insurance policies shows \(\$ 1,085\) of expired insurance.
b. An inventory shows \(\$ 120\) of unused office supplies on hand.
c. Estimated annual depreciation on the office equipment is \(\$ 1,225\).
d. Estimated annual depreciation on the automobile is \(\$ 2,665\).
e. The December telephone bill arrived after the trial balance was prepared, and its \(\$ 60\) amount was not included in the trial balance amounts. Also, a \(\$ 165\) bill for newspaper advertising that had appeared in December was not included in the trial balance amounts.
f. A client who was taking a tour around the world signed a contract with Miller Realty for the management of his apartment building. The contract calls for a \$225 monthly fee, and management began on December 1 . The client paid three months' fees in advance, and the amount paid was credited to the Unearned Management Fees account.
g. Miller Realty agreed to manage the small office building of a second client for \(\$ 250\) per month payable at the end of each three months. The contract was signed on November 15, and one and a half months' fees have accrued.
h. The one office employee is paid weekly; and on December 31, four days' wages at \(\$ 60\) per day have accrued.
3. After posting the adjusting entries, prepare an adjusted trial balance, an income statement, a statement of changes in owner's equity, and a classified balance sheet. Miller's capital account balance of \(\$ 16,700\) consists of a \(\$ 6,700\) balance on December 31, 1989, plus a \(\$ 10,000\) investment during 1990 .
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