Question
Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others are billed after services have been performed. Advanced
Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others are billed after services have been performed. Advanced payments are credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2015, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2015, but not for December.) TERRIFIC TEMPS UNADJUSTED TRIAL BALANCE DECEMBER 31, 2015 Cash $ 27,020 Accounts receivable 59,200 Unexpired insurance 900 Prepaid rent 3,000 Office supplies 600 Equipment 60,000 Accumulated depreciation: equipment $ 29,500 Accounts payable 4,180 Notes payable 12,000 Interest payable 320 Unearned fees 6,000 Income taxes payable 4,000 Unearned revenue 20,000 Retained earnings 49,000 Capital stock 25,000 Dividends 3,000 Fees earned 75,000 Travel expense 5,000 Insurance expense 2,980 Rent expense 9,900 Office supplies expense 780 Utilities expense 4,800 Depreciation expense: equipment 5,500 Salaries expense 30,000 Interest expense 320 Income taxes expense 12,000 $ 225,000 $ 225,000 Other Data 1. Accrued but unrecorded fees earned as of December 31, 2015, 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, 2015, for $1,800. 4. On December 1, 2015, the company paid its rent through February 28, 2016. 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 1, 2015, the company borrowed $12,000 by signing a six-month, 8 percent note payable. The entire note, plus six months' accrued interest, is due on February 1, 2016. 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 2016. Instructions a. For each of the numbered paragraphs, prepare the necessary adjusting entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
part 2.b. Determine that amount at which each of the following accounts will be reported in the companys 2015 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.income taxes expense
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