The unadjusted trial balance for Laurie's Laser Games at its fiscal year end of April 30, 2014, is as follows:

Additional information:
1. On April 30, 2014, Laurie's Laser Games had earned but not collected or recorded $550 of fees earned. On
May 21, 2014, Laurie's Laser Games collected this amount plus an additional $1,250 for fees earned in May.
2. There was $480 of supplies on hand on April 30, 2014.
3. The equipment has an estimated useful life of 10 years.
4. On April 30, salaries earned but not paid or recorded were $1,150. The next payday is May 8 and the employees will be paid a total of $2,290 that day.
5. The note payable has a 5% annual interest rate. Interest is paid monthly on the first of the month. The next payment is due on May 1, 2014.
6. On April 30, $1,165 of the unearned revenue had been earned.
Instructions
(a) Prepare adjusting journal entries for the year ended April 30, 2014, as required.
(b) Prepare reversing entries where appropriate.
(c) Prepare journal entries to record the May 2014 cash transactions.
(d) Now assume reversing entries were not prepared as in (b) above. Prepare journal entries to record the May 2014 cash transactions.
Taking It Further
Why is it not appropriate to use reversing entries for all of the adjusting entries?

Transcribed Image Text:

LAURIE'S LASER GAMES Trial Balance April 30, 2014 Debit $ 3,800 130,000 Credit Cash Supplies Equipment Accumulated depreciation-equipment Notes payable Unearned revenue L. Glans, capital L. Glans, drawings Fees Earned Rent expense Salaries expense Interest expense 4,270 39,000 90,000 1,965 33,100 25,000 70,180 13,200 53,850 4,125 $234,245 $234,245