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Adjusting Entries Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:

  1. Adjusting Entries

    Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:

    Milbank Repairs & Service
    Unadjusted Trial Balance
    June 30, 2019
    Debit Balances Credit Balances
    Cash 12,960
    Accounts Receivable 86,070
    Supplies 20,740
    Equipment 489,370
    Accounts Payable 20,220
    Unearned Fees 22,810
    Nancy Townes, Capital 353,000
    Nancy Townes, Drawing 17,110
    Fees Earned 518,520
    Wages Expense 120,300
    Rent Expense 91,780
    Utilities Expense 65,850
    Miscellaneous Expense 10,370
    914,550 914,550

    For preparing the adjusting entries, the following data were assembled:

    Required:

    • Fees earned but unbilled on June 30 were $9,380.
    • Supplies on hand on June 30 were $7,660.
    • Depreciation of equipment was estimated to be $12,960 for the year.
    • The balance in unearned fees represented the June 1 receipt in advance for services to be provided. During June $18,020 of the services was provided.
    • Unpaid wages accrued on June 30 were $1,660.

    1. Journalize the adjusting entries necessary on June 30, 2019.

    a. Accounts Receivable
    Fees Earned
    b. Supplies Expense
    Supplies
    c. Depreciation Expense
    Accumulated Depreciation-Equipment
    d. Unearned Fees
    Fees Earned
    e. Wages Expense
    Wages Payable

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    1. Keep in mind that you will be making an adjusting entry for each of these that affects at least one income statement account (revenue or expense) and one balance sheet account (asset or liability). As you go through each of these, consider both sides of the transaction that results in an adjusting entry and identify related accounts. Remember, four different categories of adjusting entries include prepaid expenses (deferred expenses), unearned revenues (deferred revenues), accrued expenses (accrued liabilities), and accrued revenues (accrued assets) plus the adjustment for depreciation expense.

    2. Determine the revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries.

    Revenues $
    Expenses
    Net income $

    3. Determine the revenues, expenses, and net income of Milbank Repairs & Service after the adjusting entries.

    Revenues $
    Expenses
    Net income $

    4. Determine the effect of the adjusting entries on Nancy Townes, Capital. Nancy Townes, Capital decreases by $.

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