Adjusting Entries

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

Reliable Repairs and Service
Unadjusted Trial Balance
April 30, 2018
	Debit Balances		Credit Balances
Cash	14,480
Accounts Receivable	96,160
Supplies	23,170
Equipment	483,330
Accounts Payable			22,590
Unearned Fees			25,490
Common Stock			55,000
Retained Earnings			276,000
Dividends	19,120
Fees Earned			579,250
Wages Expense	134,390
Rent Expense	102,530
Utilities Expense	73,560
Miscellaneous Expense	11,590
	958,330		958,330

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

Required:

• Fees earned but unbilled on April 30 were $10,480.
• Supplies on hand on April 30 were $8,560.
• Depreciation of equipment was estimated to be $14,480 for the year.
• The balance in unearned fees represented the April 1 receipt in advance for services to be provided. During April $20,140 of the services was provided.
• Unpaid wages accrued on April 30 were $1,850.

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1. Journalize the adjusting entries necessary on April 30, 2018.

a.	Accounts PayableAccounts ReceivableCashFees EarnedFees ExpenseFees PayableUnearned FeesAccounts Receivable	Accounts Receivable
	Accounts PayableAccounts ReceivableCashFees EarnedFees ExpenseFees PayableUnearned FeesFees Earned		Fees Earned
b.	Accounts PayableCashSuppliesSupplies ExpenseSupplies PayableSupplies RevenueSupplies ReceivableSupplies Expense	Supplies Expense
	Accounts PayableCashSuppliesSupplies ExpenseSupplies PayableSupplies RevenueSupplies ReceivableSupplies		Supplies
c.	Accounts PayableAccumulated Depreciation-EquipmentDepreciation ExpenseDepreciation PayableEquipment ExpenseEquipmentEquipment PayableDepreciation Expense	Depreciation Expense
	Accounts PayableAccumulated Depreciation-EquipmentDepreciation ExpenseEquipment ExpenseEquipmentEquipment PayableAccumulated Depreciation-Equipment		Accumulated Depreciation-Equipment
d.	Accounts PayableAccounts ReceivableCashFees EarnedFees ExpenseFees PayableUnearned FeesUnearned ReceivableUnearned Fees	Unearned Fees
	Accounts PayableAccounts ReceivableCashFees EarnedFees ExpenseFees PayableUnearned FeesFees Earned		Fees Earned
e.	Accounts PayableCashPrepaid WagesWages ExpenseWages PayableWages ReceivableWages RevenueWages Expense	Wages Expense
	Accounts PayableCashPrepaid WagesWages ExpenseWages PayableWages ReceivableWages RevenueWages Payable		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.

Learning Objective 2, Learning Objective 3, Learning Objective 4 and Learning Objective 5.

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

Revenues	$fill in the blank 6dd89e0a3fcc013_1
Expenses	fill in the blank 6dd89e0a3fcc013_2
Net income	$fill in the blank 6dd89e0a3fcc013_3

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

Revenues	$fill in the blank 6dd89e0a3fcc013_4
Expenses	fill in the blank 6dd89e0a3fcc013_5
Net income	$fill in the blank 6dd89e0a3fcc013_6

4. Determine the effect of the adjusting entries on Retained Earnings. Retained Earnings

by $fill in the blank