LO5 Problem 4-6 Use of a Trial Balance as a Basis for Adjusting Entries Bob Reynolds operates a real estate business. A trial balance on April 30, 2016, before any adjust- ing entries are recorded, appears as follows: Reynolds Realty Company Unadjusted Trial Balance April 30, 2016 Debit Credit Cash $15.700 Prepaid Insurance 450 Office Supplies 250 Office Equipment 50,000 Accumulated Depreciation - Office Equipment $ 5.000 Automobile 12.000 Accumulated Depreciation-Auto 1.400 Accounts Payable 6,500 Deferred Commissions 9,500 Notes Payablo 2.000 Capital Stock 10,000 Retained Earnings 40,000 Dividends 2.500 Commissions Revenue 17.650 Utilities Expenso 2.300 Salaries Expense 7,400 Advertising Expense 1.450 Totals $92,050 $92.050 Other Data a. The monthly insurance cost is $50. b. Office supplies on hand on April 30, 2016 amount to $180. c. The office equipment was purchased on April 1, 2015. On that date, it had an estimated useful life of ten years, d. On September 1, 2015, the automobile was purchased, it had an estimated useful life of five years. e. A deposit is received in advance of providing any services for first-time customers. Amounts received in advance are recorded initially in the account Deferred Commissions. Based on services provided to these first-time customers, the balance in this account at the end of April should be $5,000 f. Repeat customers are allowed to pay for services one month after the date of the sale of their property. Services rendered during the month but not yet collected or biled to these customers amount to $1,500 g. Interest owed on the note payable but not yet paid amounts to $20. h. Salaries owed but unpaid to employees at the end of the month amount to $2,500 Required 1. Prepare in general journal form the necessary adjusting entries at April 30, 2016. Label the entries (a) through (h) to correspond to the other data. 2. Note that the unadjusted trial balance reports a credit balance in Accumulated Depreciation- Office Equipment of $5,000. Explain why the account contains a balance of $5,000 on April 30, 2016