The unadjusted trial balance of the Contracts Plus Company as of December 31 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Contracts Plus Company. 1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any. 2) Based on a physical count, supplies on hand total $3,150. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, If any. 3) The equipment is expected to have an 5-year useful life, and be worth about $12,000 at the end of five years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry to record the monthly depreciation, if any. 4) On December 26, the client paid a $10,200 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any. 5) Contracts Plus's employee earns $140 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and prepare the necessary adjusting entry, if any. 6) In the second week of December, Contracts Plus agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $4,380, The terms of the initial agreement call for Contracts Plus to provide services from December 12, through January 10, or 30 days of service. The club agrees to pay Contracts Plus $4,380 on January 10, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any. General Journal St Retained Earnings General Income Statement Impact on income Requirement Trial Balance Balance Sheet Ledger In chapter 2, we learned how to prepare journal entries for external transactions; transactions between the company and other entities. In this chapter, we will review the trial balance to see if the balances have remained accurate, or whether they have become inaccurate as a result of internal transactions (i.e. the use of supplies, or the use of insurance coverage). This question will review the unadjusted trial balance presented in chapter 2, and demonstrate the adjusting entry process used to ensure the accuracy of the general ledger balances prior to the preparation of financial statements. General Journal tab - For transactions 1-6, review the unadjusted balance and prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred. General Ledger tab - Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted or adjusted balances. Trial Balance tab - You may view either the unadjusted or adjusted balances by choosing from the dropdown box below. Your choice will determine the reported values on the financial statement tabs. Income Statement, Statement of Retained earnings, Balance Sheet tabs - The financial statements will display the unadjusted or adjusted balances, based on your selection. Impact on Income tab - For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net Income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the dropdown.) Journal entry worksheet 1 3 The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any. Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 000: No journal entry required 101: Cash 106: Accounts receivable 126: Supplies 128: Prepaid insurance Record e View general journal 167: Eguinment 4. 2) Journal entry worksheet 1 2 3 4 5 6 > Based on a physical count, supplies on hand total $3,150. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any. Note: Enter debits before credits. Date Account Title Debit Credit De 31 168: Accumulated depreciation - Equipment 201: Accounts payable 209: Salaries payable 236: Unearned consulting revenue Record e 307: Common stock View general journal Journal entry worksheet 3 4 5 6 > The equipment is expected to have an 5-year useful life, and be worth about $12,000 at the end of five years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry to record the monthly depreciation, if any. Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 318: Retained earnings 319: Dividends 403: Consulting revenue 406: Rental revenue Record e 612: Depreciation expense - Equipment View general journal 2. Journal entry worksheet 2 3 4 On December 26, the client paid a $10,200 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any. Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 612: Depreciation expense - Equipment 622: Salaries expense 637: Insurance expense 640: Rent expense 652: Supplies expense Record e View general journal 690: Utilities expense Journal entry worksheet 1 2 3 4 Contracts Plus's employee earns $140 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and prepare the necessary adjusting entry, if any. Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 Record entry Clear entry View general journal View transaction list Journal entry worksheet 1 3 4 5 In the second week of December, Contracts Plus agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $4,380. The terms of the initial agreement call for Contracts Plus to provide services from December 12, through January 10, or 30 days of service. The club agrees to Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 Record entry Clear entry View general journal Unadjustea Unadjusted General Ledger Account Adjusted Cash Supplies No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 31 24,295 Dec 31 4,200 Prepaid insurance Equipment No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 31 3,000 33,000 Dec 31 Accounts payable Unearned consulting revenue No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 31 8,200 Dec 31 10,200 Common stock Dividends No. Date Debit Credit Balance No. Date Debit Credit Balance 42,000 1,500 Consulting revenue Rental revenue No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 31 9,400 Dec 31 500 Salaries expense Rent expense No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 31 2,380 Dec 31 1,600 Utilities expense No. Date Debit Credit Balance Dec 31 325 General General St Retained Earnings Income Impact on income Requirement Trial Balance Balance Sheet Journal Ledger Statement You may view either the unadjusted or adjusted trial balance by choosing from the drop-down box below. Your choice will determine the reported values on the financial statement tabs. Unadjusted Contracts Plus Unadjusted Trial Balance Adjusted December 31, 2016 Account Title Debit Credit Cash 24,295 Supplies 4,200 Prepaid insurance Equipment 3,000 33,000 Accounts payable Unearned consulting revenue 8,200 10,200 42,000 Common stock Dividends 1,500 Consulting revenue 9,400 Rental revenue 500 Salaries expense 2,380 Rent expense 1,600 Utilities expense 325 Total 70,300 $ 70,300 St Retained Earnings General General Income Statement Impact on income Requirement Trial Balance Balance Sheet Journal Ledger Use the drop-downs to select the accounts properly included on the income statement. The unadjusted or adjusted balances will appear for each account, based on your selection. Unadjusted Contracts Plus Unadjusted Income Statement Adjusted For Month ended December 31, 2019 Revenues: %24 Expenses: unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any. General General Income Statement St Retained Earnings Impact on income Requirement Journal Trial Balance Balance Sheet Ledger The unadjusted or adjusted balances will appear for each account, based on your selection. Unadjusted Contracts Plus Unadjusted lement of Retained Earnings Adjusted onth ended December 31, 2019 Retained earnings, December 1, 2019 Add: Net income Less: Dividends (1,500) Retained earnings, December 31, 2019 Tui each account, based on your selection. Include all balance sheet accounts, even those with zero balances. Unadjusted Contracts Plus Unadjusted Balance Sheet Adjusted December 31, 2019 Assets 101: Cash 106: Accounts receivable 126: Supplies 128: Prepaid insurance Liabilities Equity 42,000 Total equity 42,000 Total liabilities and equity 42,000 General Journal General St Retained Earnings Requirement Trial Balance Income Balance Sheet Impact on Ledger Statement income For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the dropdown.) Unadjusted Dates: Dec 31 to: Dec 31 Account affecting the: Impact on ne Income Unadjusted ted to: Dec 31 Income statement Balance Sheet Adjusted Dec 31 Supplies Depreciation Fees collected in advance Salaries Work performed in advance Total impact on income due to adjustments St Retained General Income Statement Requirement Trial Balance Impact on income Journal Ledger Earnings Balance Sheet For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the dropdown.) Unadjusted Dates: Dec 31 to: Dec 31 Unadjusted Account affecting the: pn ne me Ited to: Income statement Dec 31 Dec 31 Balance Sheet Adjusted Dec 31 Dec 31 Supplies Depreciation Fees collected in advance 101: Cash Salaries 106: Accounts receivable Work performed in advance 126: Supplies Total impact on income due to adjustmenti 128: Prepaid insurance < Balance Sheet Impact un Income>