Task 1.2 1.4 Information

Amber Nestor has an eye for quality. She recently formed an art gallery where she allows artists to display their artwork for sale. Customers buy the artwork through the gallery, but payments are actually made payable directly to the originating artist. Artists, in turn, pay Amber a 20% commission that is appropriately reflected as revenue of the gallery.

Following is Amber's trial balance after the first year of operation. This trial balance does not reflect the adjustments that are necessary, as described by the additional information.

Ambor Nestor Gallery

Trial Balance

As December of 20X4

Debits Credits

Cash $ 18,400

Supplies 6,790

Display equipment 15,000

Loan payable 7,500

Capital Stock 25,000

Revenues 48,590

Rent expense 11,000

Salaries expense 24,000

Interest expense 500

Utilities expense 5,400

$81,090 $81,090

The Display equipment was purchased near the beginning of the year. It has a 3-year life and no salvage value. Its cost should be depreciated equally over its life.

Amber is entitled to receive $17,900 of commissions for art sold. This revenue has not yet been recorded, but it is fully expected that the artists will soon be making payment.

Supplies on hand at year end were counted, and amount to $3,390.

December's rent of $1,000 has not yet been paid. Task 1.2. Prepare the necessary adjusting entries as of December 31, 20X4.

General Journal

Date Accounts Debit Credit

Dec. 31

Dec. 31

Dec. 31

Dec. 31

Task 1.3 Use T-accounts to determine the adjusted balances of the accounts. Post each transaction to the appropriate ledger accounts. Task 1.4. Prepare the adjusted trial balance for Amber Nestor.

Amber Nestor

Trial Balance

As of December 31, 20X4

Debits Credits

Total Debits/Credits