Question
5: Herzog Internet service incorporation adjusts its accounts every month. Following are the important adjustments along with unadjusted trial balance on December 31, 2019. 1.
5: Herzog Internet service incorporation adjusts its accounts every month. Following are the important adjustments along with unadjusted trial balance on December 31, 2019. 1. On December 1, the company signed a new rental agreement and paid three month's rent in advance at a rate of $2100 per month. 2. Dues and subscription expiring during December amounted to $50. 3. An estimate of supplies on hand was made at December 31; the estimated cost of unused supplies was $450. 4. The useful life of the equipment has been estimated at five years from date of acquisition. 5. Accrued interest on notes payable amounted to $100 at year end. 6. Consulting service valued at $2850 was rendered during December to clients who had made payments in advance. 7. At December 31, consulting services valued $11,000 had been rendered to clients but not yet billed. No advance payment had been received from these clients. 8. Salaries earned by employees but not paid as of December 31 amounts to 1700. 9. Income tax expense for the year is estimated at $56000. Of this amount $51000 has been recognized as expense in prior months. Herzog Internet service Inc. Unadjusted Trial balance December 31, 2019 Supplies Equipment Notes payable Income tax payable Cash Consulting fee receivable Prepaid office rent Prepaid dues and subscription Acc.depreciation: equipment Unearned consulting fee $49100 23400 6300 300 600 36000 $10200 5000 12000 5950 Capital stock 30000 Retained earnings 32700 Dividends 60,000 Consulting fee earned 257,180 Salaries expense 88820 Telephone expense 2550 Rent expense 22000 Income tax expense 51000 Dues and subscription expense 560 Supplies expense 1600 Depreciation expense: equipment 6600 Other expenses 4200 Total $353,030 $353,030 REQUIRED: Pass necessary adjusting journal entries on December 31 and also prepare Adjusted Trial Balance at December 31, 2019. (9+6)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started