Adjusting Entries and Adjusted Trial Balances

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019, the end of the current year, Pitman Company's accounting clerk prepared the following unadjusted trial balance:

Pitman Company

Unadjusted Trial Balance

October 31, 2019

Debit

Balances

Credit

Balances

Cash

4,050

Accounts Receivable

36,720

Prepaid Insurance

6,850

Supplies

1,870

Land

107,990

Building

274,780

Accumulated DepreciationBuilding

131,950

Equipment

129,770

Accumulated DepreciationEquipment

93,980

Accounts Payable

11,510

Unearned Rent

6,540

Jan Pitman, Capital

291,600

Jan Pitman, Drawing

14,320

Fees Earned

311,200

Salaries and Wages Expense

185,480

Utilities Expense

40,770

Advertising Expense

21,780

Repairs Expense

16,490

Miscellaneous Expense

5,910

846,780

846,780

The data needed to determine year-end adjustments are as follows:

Unexpired insurance at October 31, $4,590.

Supplies on hand at October 31, $560.

Depreciation of building for the year, $3,030.

Depreciation of equipment for the year, $2,630.

Unearned rent at October 31, $1,700.

Accrued salaries and wages at October 31, $2,970.

Fees earned but unbilled on October 31, $17,430.

Required:

1.Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation ExpenseBuilding; Depreciation ExpenseEquipment; and Supplies Expense.

a.

Insurance Expense

Prepaid Insurance

b.

Supplies Expense

Supplies

c.

Depreciation Expense-Building

Accumulated Depreciation-Building

d.

Depreciation Expense-Equipment

Accumulated Depreciation-Equipment

e.

Unearned Rent

Rent Revenue

f.

Salaries and Wages Expense

Salaries and Wages Payable

g.

Accounts Receivable

Fees Earned

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1. Before you begin, identify which adjusting entry goes with which additional account. As you go through each of these, consider the other sides of the adjusting entry transaction and identify related accounts. Keep in mind that you will be making an adjusting entry for each of these that affects at least one income statement account (revenues or expenses) and one balance sheet account (assets or liabilities). In the case of the insurance transaction, you will have to calculate the amount of insurance expired. In the case of supplies, you will need to calculate the amount of supplies used (expense). In the case of rent, you will need to calculate the amount of rent earned (revenue).

1.Journalize the adjusting entries using the following additional accounts, Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense.

Pitman Company

Adjusted Trial Balance

October 31, 2019

Debit Balances

Credit Balances

Cash

Accounts Receivable

Prepaid Insurance

Supplies

Land

Building

Accumulated Depreciation-Building

Equipment

Accumulated Depreciation-Equipment

Accounts Payable

Unearned Rent

Salaries and Wages Payable

Jan Pitman, Capital

Jan Pitman, Drawing

Fees Earned

Rent Revenue

Salaries and Wages Expense

Utilities Expense

Advertising Expense

Repairs Expense

Depreciation Expense-Building

Depreciation Expense-Equipment

Insurance Expense

Supplies Expense

Miscellaneous Expense