Question
Limbo Lower has completed all of its journal entries for the month of May 2022, and posted them to the general ledger. Based on the
Limbo Lower has completed all of its journal entries for the month of May 2022, and posted them to the general ledger. Based on the ledger balances, an unadjusted trial balance has been prepared. The following adjustments must be made.
May 31 | The amount of prepaid insurance is for 12 months; one month has been used. |
May 31 | Depreciation for the month on equipment was $180. |
May 31 | Unearned revenue of $630 has now been earned. |
May 31 | Work was performed for $920 which will be paid for next month. |
Required
a) Using the following unadjusted trial balance, complete the adjustments and the adjusted trial balance in the worksheet.
Do not enter dollar signs or commas in the input boxes.
Select the proper order for the headings of the worksheet.
AnswerLimbo LowerMay 31, 2022Worksheet AnswerLimbo LowerMay 31, 2022Worksheet AnswerLimbo LowerMay 31, 2022Worksheet | ||||||
Unadjusted Trial Balance | Adjustments | Adjusted Trial Balance | ||||
Account | DR | CR | DR | CR | DR | CR |
Cash | 5,940 | Answer | Answer | Answer | Answer | |
Accounts Receivable | 1,740 | Answer | Answer | Answer | Answer | |
Prepaid Insurance | 3,000 | Answer | Answer | Answer | Answer | |
Equipment | 9,260 | Answer | Answer | Answer | Answer | |
Accumulated Depreciation | Answer | Answer | Answer | Answer | ||
Accounts Payable | 3,080 | Answer | Answer | Answer | Answer | |
Unearned Revenue | 2,240 | Answer | Answer | Answer | Answer | |
Bank Loan | 4,380 | Answer | Answer | Answer | Answer | |
Patel, Capital | 7,320 | Answer | Answer | Answer | Answer | |
Patel, Withdrawals | 1,400 | Answer | Answer | Answer | Answer | |
Service Revenue | 5,630 | Answer | Answer | Answer | Answer | |
Depreciation Expense | Answer | Answer | Answer | Answer | ||
Insurance Expense | Answer | Answer | Answer | Answer | ||
Interest Expense | 80 | Answer | Answer | Answer | Answer | |
Rent Expense | 1,230 | Answer | Answer | Answer | Answer | |
Total | 22,650 | 22,650 | Answer | Answer | Answer | Answer |
b) Create the journal entries for the adjustments from the worksheet.
Date | Account Title and Explanation | Debit | Credit |
2022 | |||
May 31 | AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | ||
To expense one month of insurance | |||
May 31 | AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | ||
To depreciate Equipment | |||
May 31 | AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | ||
To recognize unearned revenue now earned | |||
May 31 | AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationBank LoanCashDepreciation ExpenseEquipmentInsurance ExpenseInterest ExpensePatel, CapitalPatel, WithdrawalsPrepaid InsuranceRent ExpenseService RevenueUnearned Revenue | Answer | ||
To accrue service revenue | |||
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