Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bill's Boards (BB) is an outdoor advertising company founded by William Longfall. William knows very little accounting so he hired a friend to keep the

image text in transcribed
image text in transcribed
image text in transcribed
Bill's Boards (BB) is an outdoor advertising company founded by William Longfall. William knows very little accounting so he hired a friend to "keep the books." Unfortunately, William did not review his friend's work and now it seems his friend has made a mess of the accounting records. William has provided you the following list of unadjusted account balances at BB's September 30 fiscal year-end. You have reviewed the balances with William and made notes shown in the right column. Account Name Cash Accounts Receivable Prepaid Rent Supplies Equipment Accumulated Depreciation BILL'S BOARDS Unadjusted Trial Balance At September 30 Debits Credits Notes $ 13,000 This balance equals the balance reported by the bank. 1,000 A customer ordered $1,000 of advertising Services to be provided in October. The accountant recorded this service by debiting Accounts Receivable and crediting Service Revenue. 800 Starting nuary 1, BB agreed to pay $1,200 cash to rent the land on which its billboards are located, for the January-December period. The accountant adjusted this account on April 30 but has not adjusted It since. BB still has suppltes costing $200 on hand on- September 30 6,000 BB bought scaffolding and billboards in October last year. $ e Because the equipment was bought at the beginning of the fiscal year, no depreciation is carried forward from prior years. 2,800 B8 purchased and received $2,000 of supplies used for creating advertising displays. The supplier is to be paid in October. 1,500 This balance relates to $1,500 cash paid by a customer in August for advertising from September 1- November 30. @ BB's employees are still waiting to be paid for the last half of September. 250 BB hasn't paid the $250 tax owed from the last fiscal year. 1,000 BB has issued 2,000 shares for $1,000 cash: 3,750 BB started business a few years ago, so this is the total accumulated earnings up to October 1 of last year. 60,700 BB has provided $2,000 of services for which it hasn't yet billed customers or recorded in its accounting records. 46,000 BB's employees earn $4,000 per month. The employees were paid in full on August 31, and were paid again on September 15. e About $1.500 of the usefulness of the equipment's Accounts Payable Deferred Revenue Salaries and Wages Payable Income Tax Payable Common Stock Retained Earnings - Service Revenue Salaries and Wages Expense Depreciation Expense 1 Prey 2 3 6 of 6 !!! Ne MP Lab Done...docx Service Hevenue Salaries and Wages Expense 46,000 Depreciation Expense 60,00 to nas provided >2, or services Tor when it hasn't yet billed customers or recorded in its accounting records. BB's employees earn $4,000 per month. The employees were paid in full on August 31, and were paid again on September 15. About $1,500 of the usefulness of the equipment's $6,000 cost has been used up during the current fiscal year. BB incurs a small cost to rent the land on which its billboards are located. Rent for the current year has been paid in full. BB's accountant expensed $2,000 of supplies purchased during the year because he assumed the supplies would be completely used by year-end. As noted above, he was wrong. BB's tax rate is 20% of income before tax. $ 69,200 Rent Expense 400 Supplies Expense 2,000 3 Income Tax Expense Totals $ 69,200 Prepare the adjusting journal entries for the year ended September 30. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet Credit No Transaction Debit 750 1 a General Journal Service Revenue Accounts Receivable 750 2 b Rent Expense Prepaid Rent 3 Depreciation Expense Accumulated Depreciation-Buildings 4 d Deferred Revenue Service Revenue Prev 1 2 3 6 of 6 Ne Prepare the adjusting journal entries for the year ended September 30. (If no entry is required for a transaction/e Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 750 Service Revenue Accounts Receivable 750 N b Rent Expense Prepaid Rent 3 Depreciation Expense Accumulated Depreciation-Buildings 4 d Deferred Revenue Service Revenue 6 5 e Accounts Receivable Service Revenue 6 Salaries and Wages Expense Salaries and Wages Payable 9 Supplies Supplies Expense 8 h Income Tax Expense Income Tax Payable

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fraud Risk Assessment Building A Fraud Audit Program

Authors: Leonard W. Vona

1st Edition

047012945X, 978-0470129456

More Books

Students also viewed these Accounting questions

Question

understand the key issues concerning international assignments

Answered: 1 week ago