The unadjusted trial balance of Packer Corporation showed the following balances at the end of its first 12-month fiscal year ended August 31, 2015: Credits Balance Debits $12,000 3,600 -0 2,500 15,000 60,000 3,000 20,000 $ -0- -0- -0- 4,400 -0- -0- 1,200 800 Cash Accounts Receivable Prepaid Insurance Supplies Land Building Furniture Equipment Accumulated Depreciation - Building Accumulated Depreciation - Equipment Accumulated Depreciation - Furniture Accounts Payable Salaries Payable Interest Payable Unearned Commissions Revenue Unearned Subscriptions Revenue Bank Loan Share Capital Retained Earnings Income Summary Commissions Earned Subscriptions Revenue Advertising Expense Depreciation Expense - Building Depreciation Expense - Equipment Depreciation Expense - Furniture Insurance Expense Interest Expense Salaries Expense Supplies Expense Utilities Expense Totals 47,600 52,100 -0 -0- 37,900 32,700 4,300 -0- -0- 1,800 2,365 33,475 15,800 2,860 $176,700 $176,700 At the end of August, the following additional information is available: (a) The company's insurance coverage is provided by a single comprehensive 12-month policy that began on March 1, 2015. (b) Supplies on hand total $2,850. (c) The building has an estimated useful life of 50 years. Problems 149 (d) The furniture has an estimated useful life of ten years. (e) The equipment has an estimated useful life of 20 years. (f) Interest of $208 on the bank loan for the month of August will be paid on September 1, when the regular $350 payment is made. (g) A review of the unadjusted balance in the unearned commissions revenue account indicates the unearned balance should be $450. (h) A review of the unadjusted balance in the subscription revenue account reveals that $2,000 has not been earned. (i) Salaries that have been earned by employees in August but are not due to be paid to them until the next payday (in September) amount to $325. Required: 1. Set up necessary general ledger T-accounts and record their unadjusted balances. Create and assign account numbers that you deem appropriate. (i) Salaries that have been earned by employees in August but are not due to be paid to them until the next payday (in September) amount to $325. Required: 1. Set up necessary general ledger T-accounts and record their unadjusted balances. Create and assign account numbers that you deem appropriate. 2. Prepare the adjusting entries. Descriptions are not needed. 3. Post the adjusting entries to the general ledger T-accounts and calculate balances. 4. Prepare an adjusted trial balance at August 31, 2015. 5. Prepare an income statement and balance sheet. 6. Prepare and post the closing entries. 7. Prepare a post-closing trial balance. PROBLEM 3-8 (L01,2,3) Challenge Question - Adjusting Entries Below is an unadjusted trial balance for Smith and Smith Co., at June 30, 2016. The unadjusted trial balance of Packer Corporation showed the following balances at the end of its first 12-month fiscal year ended August 31, 2015: Credits Balance Debits $12,000 3,600 -0 2,500 15,000 60,000 3,000 20,000 $ -0- -0- -0- 4,400 -0- -0- 1,200 800 Cash Accounts Receivable Prepaid Insurance Supplies Land Building Furniture Equipment Accumulated Depreciation - Building Accumulated Depreciation - Equipment Accumulated Depreciation - Furniture Accounts Payable Salaries Payable Interest Payable Unearned Commissions Revenue Unearned Subscriptions Revenue Bank Loan Share Capital Retained Earnings Income Summary Commissions Earned Subscriptions Revenue Advertising Expense Depreciation Expense - Building Depreciation Expense - Equipment Depreciation Expense - Furniture Insurance Expense Interest Expense Salaries Expense Supplies Expense Utilities Expense Totals 47,600 52,100 -0 -0- 37,900 32,700 4,300 -0- -0- 1,800 2,365 33,475 15,800 2,860 $176,700 $176,700 At the end of August, the following additional information is available: (a) The company's insurance coverage is provided by a single comprehensive 12-month policy that began on March 1, 2015. (b) Supplies on hand total $2,850. (c) The building has an estimated useful life of 50 years. Problems 149 (d) The furniture has an estimated useful life of ten years. (e) The equipment has an estimated useful life of 20 years. (f) Interest of $208 on the bank loan for the month of August will be paid on September 1, when the regular $350 payment is made. (g) A review of the unadjusted balance in the unearned commissions revenue account indicates the unearned balance should be $450. (h) A review of the unadjusted balance in the subscription revenue account reveals that $2,000 has not been earned. (i) Salaries that have been earned by employees in August but are not due to be paid to them until the next payday (in September) amount to $325. Required: 1. Set up necessary general ledger T-accounts and record their unadjusted balances. Create and assign account numbers that you deem appropriate. (i) Salaries that have been earned by employees in August but are not due to be paid to them until the next payday (in September) amount to $325. Required: 1. Set up necessary general ledger T-accounts and record their unadjusted balances. Create and assign account numbers that you deem appropriate. 2. Prepare the adjusting entries. Descriptions are not needed. 3. Post the adjusting entries to the general ledger T-accounts and calculate balances. 4. Prepare an adjusted trial balance at August 31, 2015. 5. Prepare an income statement and balance sheet. 6. Prepare and post the closing entries. 7. Prepare a post-closing trial balance. PROBLEM 3-8 (L01,2,3) Challenge Question - Adjusting Entries Below is an unadjusted trial balance for Smith and Smith Co., at June 30, 2016