• Create a Trial Balance: reports at different stages in the accounting cycle including (1) an Unadjusted Trial Balance, (2) an Adjusted Trial Balance and a (3) Post-Closing Trial Balance

This small business records adjusting entries monthly. Closing entries are performed annually on December 31. Beginning balances are provided below. During December, the following transactions occurred:
Information for December transactions:

Dec.1 Jack invests another $40,000 of personal cash into the business.
Dec.2 Purchase new laptops and software for $12,000 from Online Office Plus. Pay $2,000 cash and issue a four-year note payable for the balance due.

Dec.3 Pay $12,000 to Big Guys Real Estate for three months’ advance rent on the office space.
Dec. 4 Purchase $500 office supplies on account from Office Depot. Payment is due in 30 days. These supplies are expected to last for several months.

Dec. 8 Receive $12,000 cash advance payment from Superior Dentistry. This amount represents discounted pricing for a full year of accounting, payroll and tax services.
Dec. 12 Pay salaries for the first bi-weekly two week payroll in December, $15,000.
Dec. 15 Excluding the Superior Dentistry advance, service revenue earned during the first 15 days of December is $26,000. $13,000 is received in cash, and the remainder will be billed to customers.
Dec. 17 Purchase 3 used printers from Bob’s Office Supply for $600. Payment is due in 10 days.
Dec. 20 Pay MICPA $1700 for tax training seminars.
Dec. 23 Collect $10,000 of the accounts receivable related to Dec. 15 revenue.
Dec. 24 Pay salaries for the second bi-weekly two week payroll in December, $15,000.
Dec. 26 Met with City Chiropractor Central. Contract signed at $12,000 for 20% annual discounted services including a full year of accounting, payroll and tax services. This contract begins January 1^st.
Dec. 27 Pay $600 account payable due to Bob’s Office Supply.
Dec. 28 Pay Jack a year-end $20,000 owner withdrawal.
Dec. 29 Zen Accounting was named in a personal lawsuit related to an ugly IRS dispute. The extent of the company’s legal and financial responsibility for this accident, if any, cannot be determined at this time.
Dec. 29 Re-new and purchase a 12-month umbrella liability insurance policy for $9,600. We also paid $9,600 last year in December for a one year policy.
Dec. 30 Service revenue earned during the 2^nd half of December is $14,000. $8,000 is received in cash, and the remainder will be billed to customers.

Dec. 31 Receive $400 bill from the City for December utilities.

Information for Adjusting Entries:

a) The annual interest rate on the note payable to Online Office Plus is 6%.

b) The new laptops and software (office equipment) is being depreciated by the straight-line method over a period of 4 years with no salvage value. We will not depreciate the used printers until January.

c) The advance payment of rent on December 3 covers a period of three months.

d) Office supplies on hand at December 31 are $100.

e) During December, the company earns $1,000 of the rental fees paid in advance by Superior Dentistry on December 8.

f) Salaries earned by employees since the last payroll date are $2,000 and will be paid in January.

g) Record insurance expired during December.

Check Numbers:

Make sure to work in stages throughout the accounting cycle, stopping and checking your trial balance totals before moving on to the next stage.

Unadjusted Trial Balance $123,200

Adjusted Trial Balance $125,500

Post-Closing Trial Balance $65,800