PROBLEM 38 (LO1,2,3) Challenge Queson Adjusng Entries Below is an unadjusted trial balance for Smith and Smith Co., at June 30, 2016. 148 Financial Accounng and Adjusng Entries Smith and Smith Co. Unadjusted Trial Balance At June 30, 2016 Debit Credit Cash $ 50,400 Accounts receivable 25,000 Shop supplies 1,500 Prepaid insurance expense 4,500 Prepaid adversing expense 2,000 Prepaid rent expense Building 74,000 Accumulated depreciaon, building $ Equipment 10,000 Accumulated depreciaon, equipment 2,000 Accounts payable 12,000 Accrued salaries payable 15,500 Interest payable Income taxes payable Notes payable 20,000 Unearned service revenue 30,000 Share capital 1,000 Retained earnings 24,900 Service revenue 125,000 Salaries expense 22,000 Insurance expense Interest expense Shop supplies expense 200 Adversing expense 2,200 Depreciaon expense 1,400 Maintenance service expensee 5,200 Rent expense 20,000 Income tax expense Ulies expense 12,000 $230,400 $230,400 Addional informaon for June not yet recorded: a. Unbilled and uncollected work to June 30 totals $45,000. b. An analysis of prepaid adversing shows that $500 of the balance was consumed. c. A shop supplies count on June 30 shows that $1,200 are on hand. d. Equipment has an esmated useful life of ten years and an esmated residual value of $500. Problems 149 e. The records show that fiy percent of the work, for a $10,000 fee received in advance from a customer and recorded last month, is now completed. f. Salaries of $5,800 for employees for work done to the end of June has not been paid. g. Ulies invoice for services to June 22 totals $3,500. h. Accrued revenues of $7,800 previously recorded to accounts receivable were collected. i. A building was purchased at the end of May. Its esmated useful life is fiy years and has an esmated residual value of $10,000. j. Rent expense of $5,000 cash for July has been paid and recorded directly to rent expense. k. Interest for the 6% note payable has not yet been recorded for June. l. Income taxes of $3,000 is owing but not yet paid. m. Unrecorded and uncollected service revenue of $9,000 has been earned. n. A two year, $1,800 insurance policy was purchased on June 1 and recorded to prepaid insurance expense. o. The prior balance in the unadjusted prepaid insurance account (excluding the insurance in item n. above), shows that $300 of that balance is not yet used. Required: 1. Prepare the adjusng and correcng entries for June. 2. Prepare an adjusted trial balance at June 30, 2016.

PROBLEM 3-8 (LO1,2,3) Challenge Question - Adjusting Entries Below is an unadjusted trial balance for Smith and Smith Co., at June 30, 2016. 148 - Financial Accounting and Adjusting Entries Smith and Smith Co. Unadiusted Trial Ralance PROBLEM 3-8 (LO1,2,3) Challenge Question - Adjusting Entries Below is an unadjusted trial balance for Smith and Smith Co., at June 30, 2016. 148 - Financial Accounting and Adjusting Entries Smith and Smith Co. Unadiusted Trial Ralance