PROBLEM 4.5A Preparing Adjusting Entries and Determining Account Balances (4) LO4-1, (3) LO4-2, Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis. Below is an unadjusted trial balance dated December 31 of the current year. (Bear in mind that adjusting entries have already been made for the first 11 months, but not for Other Data 1. Accrued but unrecorded fees earned as of December 31 amount to $1,500. 2. Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as of December 31 . 3. The company purchased a six-month insurance policy on September 1 of the current year for $1,800. 4. On December 1 of the current year the company paid its rent through February 28 of the upcoming year. 5. Office supplies on hand at December 31 amount to $400. 6. All equipment was purchased when the business first formed. The estimated life of the equipment at that time was 10 years (or 120 months). 7. On August I of the current year the company borrowed $12,000 by signing a 6 month, 8 percent note payable. The entire note, plus 6 months' accrued interest, is due on February 1 of the upcoming year. 8. Accrued but unrecorded salaries at December 31 amount to $2,700. 9. Estimated income taxes expense for the entire year totals $15,000. Taxes are due in the first quarter of the upcoming. Instructions a. For each of the numbered paragraphs. prepare the necessary adjusting entry (including an explanation). b. Determine that amount at which each of the following accounts will be reported in the company's current year income statement. 1. Fees Earned 2. Travel Expense 3. Insurance Expense 4. Rent Expense 5. Office Supplies Expense 6. Utilities Expense 7. Depreciation Expense: Equipment 8. Interest Expense 9. Salaries Expense 10. Income Taxes Expense c. The unadjusted trial balance reports dividends of $3,000. Have these dividends been paid as of December 31 ? Explain. PROBLEM 4.5A Preparing Adjusting Entries and Determining Account Balances (4) LO4-1, (3) LO4-2, Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis. Below is an unadjusted trial balance dated December 31 of the current year. (Bear in mind that adjusting entries have already been made for the first 11 months, but not for Other Data 1. Accrued but unrecorded fees earned as of December 31 amount to $1,500. 2. Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as of December 31 . 3. The company purchased a six-month insurance policy on September 1 of the current year for $1,800. 4. On December 1 of the current year the company paid its rent through February 28 of the upcoming year. 5. Office supplies on hand at December 31 amount to $400. 6. All equipment was purchased when the business first formed. The estimated life of the equipment at that time was 10 years (or 120 months). 7. On August I of the current year the company borrowed $12,000 by signing a 6 month, 8 percent note payable. The entire note, plus 6 months' accrued interest, is due on February 1 of the upcoming year. 8. Accrued but unrecorded salaries at December 31 amount to $2,700. 9. Estimated income taxes expense for the entire year totals $15,000. Taxes are due in the first quarter of the upcoming. Instructions a. For each of the numbered paragraphs. prepare the necessary adjusting entry (including an explanation). b. Determine that amount at which each of the following accounts will be reported in the company's current year income statement. 1. Fees Earned 2. Travel Expense 3. Insurance Expense 4. Rent Expense 5. Office Supplies Expense 6. Utilities Expense 7. Depreciation Expense: Equipment 8. Interest Expense 9. Salaries Expense 10. Income Taxes Expense c. The unadjusted trial balance reports dividends of $3,000. Have these dividends been paid as of December 31 ? Explain