Question: Hey im having trouble getting my Balance sheet to balance out after i put in and adjust all of my entries.

The Accounting Information System. It requires you to complete a problem involving four separate steps in the accounting cycle preparing adjusting entries, preparing an adjusted trial balance, preparing closing entries and preparing a post-closing trial balance.

Problem

Gabriel & Co. is an architecture firm with offices in several of the larger cities in the southeastern US. Gabriels fiscal year-end is December 31, and it prepares financial statements just once a year, at year-end. For bookkeeping purposes, Gabriel has adopted a policy to record payments and collections in advance into asset and liability accounts, respectively. The companys unadjusted trial balance at December 31, 2017 is shown below. All accounts have normal-side balances.

Accounts Payable $ 438,120

Accounts Receivable 1,067,615

Accumulated Depreciation Buildings 93,033

Accumulated Depreciation Equipment 225,537

Advertising Expense 71,340

Allowance for Doubtful Accounts 10,216

Buildings 1,026,960

Cash 610,472

Common Stock ($5 par) 192,500

Dividends 238,200

Equipment 491,376

Insurance Expense 8,625

Interest Expense 28,523

Land 407,655

Maintenance and Repairs Expense 38,810

Notes Payable 673,580

Prepaid Insurance 251,748

Retained Earnings 319,521

Salaries and Wages Expense 1,902,485

Service Revenue 4,352,920

Unearned Rent Revenue 33,192

Utilities Expense 194,810

Additional information available at year-end is as follows:

Gabriel operates 5 days a week, Mondays through Fridays. Employees are paid each Tuesday, for hours worked through the previous Friday. On Tuesday, December 26, 2017, the last pay day in 2017, Gabriel paid its employees for hours worked during the week of December 18-22. The employees then worked their regular schedule through the end of the year. Note that Monday, December 25 was a paid holiday for all employees. Gabriels payroll averages $7,620 per day.

Gabriel sometimes leases unused space in its buildings to other businesses. On June 1, 2017, a new tenant signed a 5-year lease and paid the first 12 months rent of $33,192 in advance. The lease began on that date and runs through May 31, 2022.

Gabriel performed $186,519 of architectural services for several clients in December 2017 that it has not yet billed, recorded or collected.

On February 1, 2017, Gabriel purchased a new, 3-year insurance policy for $251,748. Gabriel paid the full cost of the policy in advance. The new policy provides coverage through January 31, 2020.

Gabriel estimates that 7.85% of the 2017 year-end accounts receivable balance will not be collected.

On August 10, 2017, Gabriel paid $46,872 for magazine ads to run evenly over a 9-month period, starting September 1, 2017. Note Contrary to the companys normal practice, Gabriels bookkeeper recorded the prepayment into the Advertising Expense account. Give the adjusting entry needed when a company uses the expense approach to record a payment in advance.

The Notes Payable balance relates to a bank loan obtained in 2016 that is payable in full on October 31, 2021. The loan agreement specifies that Gabriel pay interest annually on October 31 at the rate of 4.9%. Gabriels bookkeeper made the proper entry for the first interest payment, on October 31, 2017. (Hint Think about the entry Gabriel made on the first interest payment date.)

Gabriel purchased its buildings in 2012 and its equipment in 2010. Gabriel depreciates its fixed assets according to the straight-line method. For the buildings, it uses estimates of 40 years for the useful life and $200,000 for the salvage value. For the equipment, it uses estimates of 12 years for the useful life and $75,000 for the salvage value.

In the first week of January 2018, Gabriel received bills for December 2017 utilities totaling $19,512. The company paid all of these bills in late January 2018.

The companys income tax rate for the year is 30%. (Hint The income tax rate is applied to the companys income after all revenues and expenses have been considered except for the income tax charge.)

Instructions

Complete the following four tasks relating to Gabriel & Co.s accounting process at year-end 2017:

(a) Prepare the adjusting journal entries needed at December 31, 2017.

(b) Prepare an adjusted trial balance as of December 31, 2017. List the accounts in an appropriate trial balance order.

(c) Prepare the closing journal entries needed at December 31, 2017. Gabriel uses an Income Summary account.

(d) Prepare a post-closing trial balance as of December 31, 2017. List the accounts in an appropriate trial balance order.