On the attached worksheet, you will find the UNADJUSTED trial balance of LADD AGENCIES for its year ended December 31, 2014. Ms. Ladd began her own detective agency in January 2013. She hired 2 other female detectives to work with her, along with a personal secretary named Mr. Spelling. In discussion with Ms. Ladd, you discover the following about LADD AGENCIES: 1. The office supplies were counted on December 31, 2013 with a cost value of $1,000.00. During 2014, the business purchased $3,250.00 of office supplies. The office supplies were counted on December 31 , 2014 with a cost value of $1,200.00. 2. The bookkeeper is paid $2,000 every two weeks. She was last paid on December 24, 2014, so at December 31, 2014 she is owed one week's wages. She will be paid $2,000 on January 7, 2015 for the two-week period ended January 7, 2015. 3. Computer equipment was purchased on November 1,2014 for $25,000. The business plans to use the computer equipment for 3 years, at which time its salvage/residualvalue is expected to be $7,000. In the year that a capital asset is purchased, depreciation is recorded to the nearest whole month. 4. Ms. Ladd has informed you that a billing from the Agency for services provided to Mr. Charlie in the amount of $4,000 has been mailed to him, but not recorded in the accounts of the business because the money was not recelved by December 31, 2014. Mr. Charlie has promised to pay in January 2015. 5. The December 2014 telephone bill for $300 was received in the mail on January 5, 2015, so it was not paid before then, nor recorded in the unadjusted trial balance dated December 31,2014. 6. Insurance costing $2,400 was purchased on September 1, 2014 for the period October 1, 2014 through September, 2015. 7. Ladd Agencies arranged a five-year note payable in order to purchase the equipment. Interest for December 2014 calculated at the rate of 1% per month on the loan balance will be paid on January 2 , 2015. The loan calls for principle repayments of $5,000 per year each January 2 beginning January 2, 2015. 8. In reviewing the December 2014 deposits to the bank account, you find a cheque that was received from BAD Co, for $1,000. The money was credited to Detective Fees earned when it was received and the Agency had NOT completed the required work by December 31, 2014. 9. In December 2013, the business prepaid its rent through February 2014. Monthly rent is $1,000 per month. In December 2014, the company prepaid rent through March 2015. 10. SUBSEQUENT GENERAL JOURNAL ENTRY REQUIRED - COMPLETE THE FOLLOWING FOR LADD AGENCIES: 1. Prepare adjusting journal entries in proper general journal form for the number 1 - 9 above on the attached general journal page (27 marks). 2. Enter the adjusting journal entries to the attached adjusting entries to the adjustments column on the attached trial balance ( 9 marks). 3. Complete the adjusted trial balance columns on the attached trial balance ( 5 marks). 4. Prepare the subsequent general journal entry for number 10 above to record the payment of wages on January 7, 2015 (see number 2 above)
