Question
Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations: Milbank Repairs
Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:
Milbank Repairs & Service
UNADJUSTED TRIAL BALANCE
June 30, 2019
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 | Cash | 10,350.00 |
|
2 | Accounts Receivable | 67,500.00 |
|
3 | Supplies | 16,200.00 |
|
4 | Equipment | 166,100.00 |
|
5 | Accounts Payable |
| 15,750.00 |
6 | Unearned Fees |
| 18,000.00 |
7 | Nancy Townes, Capital |
| 171,500.00 |
8 | Nancy Townes, Drawing | 13,500.00 |
|
9 | Fees Earned |
| 294,750.00 |
10 | Wages Expense | 94,500.00 |
|
11 | Rent Expense | 72,000.00 |
|
12 | Utilities Expense | 51,750.00 |
|
13 | Miscellaneous Expense | 8,100.00 |
|
14 | Totals | 500,000.00 | 500,000.00 |
For preparing the adjusting entries, the following data were assembled:
Fees earned but unbilled on June 30 were $7,380.
Supplies on hand on June 30 were $2,775.
Depreciation of equipment was estimated to be $11,000 for the year.
The balance in unearned fees represented the June 1 receipt in advance for services to be provided. During June, $16,500 of the services were provided.
Unpaid wages accrued on June 30 were $3,880.
Required: 1. Journalize the adjusting entries necessary on June 30, 2019. Refer to the Chart of Accounts for exact wording of account titles.
2. Determine the revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries.
3. Determine the revenues, expenses, and net income of Milbank Repairs & Service after the adjusting entries.
4. Determine the effect of the adjusting entries on Nancy Townes, Capital.
1. Journalize the adjusting entries necessary on June 30, 2019.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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Solution
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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1 | Adjusting Entries | |||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
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6 | ||||||||
7 | ||||||||
8 | ||||||||
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11 |
2. Determine the revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries.
Before Adjusting Entries |
1 | Revenues | |
2 | Expenses | |
3 | Net income |
3. Determine the revenues, expenses, and net income of Milbank Repairs & Service after the adjusting entries.
After Adjusting Entries |
1 | Revenues | |
2 | Expenses | |
3 | Net income |
4. Determine the effect of the adjusting entries on Nancy Townes, Capital.
The adjusting entries net income by .
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