E4-20 (Algo) Preparing Adjusting Entries, an Adjusted Trial Balance, and Financial Statements [LO 4-1, LO 4-2, LO 4-3, LO 4-4] (General Ledger)

Bills 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 BBs September 30 fiscal year-end. You have reviewed the balances with William and made notes shown in the right column.

BILLS BOARDS
Unadjusted Trial Balance
At September 30
Account Name	Debits	Credits	Notes
Cash	$ 12,400		This balance equals the balance reported by the bank.
Accounts Receivable	810		A customer ordered $810 of advertising services to be provided in October. The accountant recorded this service by debiting Accounts Receivable and crediting Service Revenue.
Prepaid Rent	1,360		Starting January 1, BB agreed to pay $2,040 cash to rent the land on which its billboards are located, for the JanuaryDecember period. The accountant adjusted this account on April 30 but has not adjusted it since.
Supplies	0		BB still has supplies costing $510 on hand on September 30.
Equipment	6,000		BB bought scaffolding and billboards in October last year.
Accumulated Depreciation		$ 0	Because the equipment was bought at the beginning of the fiscal year, no depreciation is carried forward from prior years.
Accounts Payable		2,310	BB purchased and received $2,310 of supplies used for creating advertising displays. The supplier is to be paid in October.
Deferred Revenue		1,410	This balance relates to $1,410 cash paid by a customer in August for advertising from September 1November 30.
Salaries and Wages Payable		0	BBs employees are still waiting to be paid for the last half of September.
Income Tax Payable		510	BB hasnt paid the $510 tax owed from the last fiscal year.
Common Stock		2,410	BB has issued 4,810 shares for $2,410 cash.
Retained Earnings		9,110	BB started business a few years ago, so this is the total accumulated earnings up to October 1 of last year.
Service Revenue		57,610	BB has provided $4,820 of services for which it hasnt yet billed customers or recorded in its accounting records.
Salaries and Wages Expense	47,700		BBs employees earn $5,700 per month. The employees were paid in full on August 31, and were paid again on September 15.
Depreciation Expense	0		About $1,500 of the usefulness of the equipments $6,000 cost has been used up during the current fiscal year.
Rent Expense	680		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.
Supplies Expense	4,410		BBs accountant expensed $4,410 of supplies purchased during the year because he assumed the supplies would be completely used by year-end. As noted above, he was wrong.
Income Tax Expense	0		BBs tax rate is 20% of income before tax.
Totals	$ 73,360	$ 73,360

Each journal entry is posted automatically to the general ledger.

Unadjusted Adjusted Post-closing

Unadjusted

General Ledger Account

Cash
No.	Date	Debit	Credit	Balance
	Sep 30			12,400

Accounts Receivable
No.	Date	Debit	Credit	Balance
	Sep 30			810

Prepaid Rent
No.	Date	Debit	Credit	Balance
	Sep 30			1,360

Equipment
No.	Date	Debit	Credit	Balance
	Sep 30			6,000

Accounts Payable
No.	Date	Debit	Credit	Balance
	Sep 30			2,310

Income Tax Payable
No.	Date	Debit	Credit	Balance
	Sep 30			510

Deferred Revenue
No.	Date	Debit	Credit	Balance
	Sep 30			1,410

Common Stock
No.	Date	Debit	Credit	Balance
	Sep 30			2,410

Retained Earnings
No.	Date	Debit	Credit	Balance
	Sep 30			9,110

Service Revenue
No.	Date	Debit	Credit	Balance
	Sep 30			57,610

Rent Expense
No.	Date	Debit	Credit	Balance
	Sep 30			680

Salaries and Wages Expense
No.	Date	Debit	Credit	Balance
	Sep 30			47,700

Supplies Expense
No.	Date	Debit	Credit	Balance
	Sep 30			4,410