Question

Pharoah Company had the following trial balance at June 30, 2021 (its year-end).

During the month of July, the following selected transactions took place:

July 2 Paid $ 780 cash for rent for July, August, and September.

10 Purchased $ 100 of supplies for cash.

14 Collected the full balance of accounts receivable.

20 Received $ 720 cash from a customer for services to be provided in August.

25 Provided $ 1,310 of services for a customer and immediately collected cash.

Additional information:

1. At July 31, the company had provided $ 730 of services for a customer that it had not billed

2. Supplies on hand at July 31 were $ 750.

3. The equipment has a six-year useful life.

4. As at July 31, the company had performed services of $ 950 that had been paid in advance

Answer 1

		Debit	Credit
July 2	Prepaid Rent	780
	Cash		780
	(Paid rent in advance.)
July 10	Supplies	100
	Cash		100
	(Purchase supplies for cash.)
July 14	Cash	860
	Accounts Receivable		860
	(Collection on account.)
July 20	Cash	720
	Unearned Revenue		720
	(Received cash in advance from customer.)
July 25	Cash	1310
	Service Revenue		1310
	(To record services provided)
July 31	Accounts Receivable	730
	Service Revenue		730
	To accrue revenue for services performed but not billed or collected)
July 31	Rent expense	260		=780*1/3
	Prepaid Rent		260
	(To record rent expense.)
July 31	Supplies expense	610		=1260+100-750
	Supplies		610
	(To record supplies used.)
July 31	Depreciation expense	137		=9864/6*1/12
	Accumulated Depreciation-Equipment		137
	(To record depreciation expense.)
July 31	Unearned Revenue	950
	Service Revenue		950
	(To record revenue for services performed)

Answer 2