Ana NATOW 12 . B TU A. E DE P6 Determining Adjusting Entries, Posting to T Accounts, and Preparing an Adjusted Trial Balance LO 3,4 Brave Advisor's Service's trial balance on December 31, 2014, is as follow 16,500 8.250 2.662 1.320 9.240 Brave Advisors Service Trial Balance December 31, 2014 Cash Accounts Receivable Office Supplies Prepaid Rent Office Equipment Accumulated Depreciation ---Office Equipment Accounts Payable Notes Payable Unearned Service Revenue B. Cooper, Capital B. Cooper, Withdrawals Service Revenue Salaries Expense Rent Expense Utilities Expense 1.540 5,940 11.000 2.970 24,002 22,000 72.600 49.400 4,400 4.280 118,052 118,052 The following information is also available: 1. Ending inventory of office supplies, $264 2. Prepaid rent expired, $440 3. Depreciation of office equipment for the period, S660 4. Accrued interest expense at the end of the period. $550 5. Accrued salaries at the end of the period, $330 6. Service revenue still unearned at the end of the period, $1,166 7. Service revenue earned but unrecorded, $2,200 REQUIRED 1. Open T accounts for the accounts in the trial balance plus the following: Interest Payable; Salaries Payable; Office Supplies Expense; Depreciation Expense-Office Equipment; and Interest Expense. Enter the balances shown on the trial balance. 2. Determine the adjusting entries and post them directly to the T accounts. 3. Prepare an adjusted trial balance. 4. Prepare an income statement, a statement of owner's equity, and a balance sheet for the period ended December 31, 2014. Arial Narrow A .. ii Section 2 Accounting Applications How does Reliable adjust its revenues and expenses so that its net income is properly measured? Reliable's trial balance follows. D A B 1 Reliable Answering Service 2 Trial Balance 3 December 31, 2014 4 5 Cash B Accounts Receivable z Office Supplies Prepaid Insurance Office Equipment 10 Accumulated Depreciation Office Equipment 11 Accounts Payable 12 Uneamed Revenue 13 T. Ramos, Capital 14 T. Ramos, Withdrawals 15 Answering Service Revenue 10 Wages Expense 17 Rent Expense 2,160 1.250 180 240 3,400 600 700 460 4,870 400 2,900 1,500 400 0.530 0.530 The following information is also available for the company on December 31, 2014: 1. Insurance that expired during December amounted to $40. 2. Office supplies on hand on December 31 totaled $75. 3. Depreciation for December totaled $100. 4. Accrued wages on December 31 totaled $120. 5. Revenues earned for services performed in December but not billed by the end of the month totaled $300. 6. Revenues received in advance of services still to be performed totaled $300 at the end of the year. REQUIRED In order to understand how Reliable adjusts its revenues and expenses so that its net income is properly measured, complete the following: 1. Open ledger accounts for the accounts in the trial balance PLUS the following: Wages Payable (210), Office supplies Expense (510). Depreciation Expense - Omice Equipment (515) and Insurance Expense (520). 2. Determine the required adjusting entries and record them in the general journal. 3. Post the entries to the general ledger. Open new general ledger accounts as needed. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owner's equity, and a balance sheet for the month ended December 31, 2014
