Pat Okendo started her own consulting firm, Okendo Consulting, on May 1, 2014. The trial balance at
Question:
Pat Okendo started her own consulting firm, Okendo Consulting, on May 1, 2014.
The trial balance at May 31 is as shown on the next page.
OKENDO CONSULTING Trial Balance May 31, 2014 Debit Credit Cash $ 7,500 Accounts Receivable 3,000 Supplies 2,500 Prepaid Insurance 3,600 Equipment 12,000 Accounts Payable $ 3,500 Unearned Service Revenue 4,000 Common Stock 19,100 Service Revenue 7,500 Salaries and Wages Expense 4,000 Rent Expense 1,500 $34,100 $34,100 In addition to those accounts listed on the trial balance, the chart of accounts for Okendo Consulting also contains the following accounts: Accumulated Depreciation—Equipment, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.
Other data:
1 $1,000 of supplies have been used during the month.
2 Utility costs incurred but not paid are $300.
3 The insurance policy is for 3 years.
4 $1,500 of the balance in the Unearned Service Revenue account remains unearned at the end of the month.
5 Assume May 31 is a Tuesday and employees are paid on Fridays. Okendo Consulting has two employees that are paid $600 each for a 5-day work week.
6 The equipment has a 5-year life with no salvage value and is being depreciated at $200 per month for 60 months.
7 Invoices representing $1,500 of services performed during the month have not been recorded as of May 31.
Instructions
(a) Prepare the adjusting entries for the month of May.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. (Use T-accounts.)
(c) Prepare an adjusted trial balance at May 31, 2014.AppendixLO1
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9781118771112
5th Edition
Authors: Kimmel, Wetlands, Kieso