Question

Please help you solve step by step Silver Line company adjusts its accounts monthly, performs closing entries annually. The firm's unadjusted trial balance as of December 31. 2011 is on the worksheed enclosed. a) Accrued but unrecorded and uncollected consulting services revenue toals 1.500 USD at December 31.,2011 b) The company detemined that 2.500 USD ofpreviously unemed consulting services revenue had been eamed at December 31.2011 c) Office supplies on hand at December 31 total 110 USD d) The company purchased all of its equipment when it first began business. At that time, the estimated useful life of the equipment was five years. (60 months) e) The company prepaid its 6 month rent agreement on October 1, 2011 f) The company prepaid its 12 month insurance policy on May 1,2011 g) Accrued but unpaid salaries total 2 000 USD at December 31. 2011 h) On June 1, 2011 the company borrowed 10 000 USD buy signing a nine-month, 8 percent note payable. The entire amount , plus interest, is due on March 1, 2011 The company tax auditor estimated income tax expense for the entire year as 7 000 USD. The unpaid portion is due in 2012.

Answer 1

	Unadjusted Trial Balance		Adjusted Trial Balance		Closing entries		Balance Sheet
	Debit	Credit	Debit	Credit	Debit	Credit	Assets	Liabilities & Equity
Cash	45835		45835				45835
Accounts receivable	2000		3500				3500
Office supplies	205		110				110
Prepaid rent	1200		900				900
Unexpired insurance	270		216				216
Office equipment	60000		60000				60000
Accumulated depreciation: office equipment		35250		36000				36000
Accounts payable		1400		1400				1400
Interest payable		360		420				420
Income taxes payable		1750		1850				1850
Salaries payable				2000				2000
Notes payable		9000		9000				9000
Unearned consulting services revenue		3500		1000				1000
Capital stock		30000		30000				30000
Retained earnings		12000		12000				28891
Dividends	1000		1000
Consulting services revenue		65000		69000		69000
Office supplies expense	605		700		700
Depreciation expense: office equipment	8250		9000		9000
Rent expense	3525		3825		3825
Insurance expense	1010		1064		1064
Salaries expense	27100		29100		29100
Interest expense	360		420		420
Income taxes expense	6900		7000		7000
	158260	158260	162670	162670	51109	69000
Net income					17891
					69000	69000	110561	110561
ADJUSTING JOURNAL ENTRIES:
Accounts receivable	1500
Consulting services revenue		1500
Unearned consulting services revenue	2500
Consulting services revenue		2500
Office supplies expense	95
Office supplies		95
Depreciation expense: office equipment	750
Accumulated depreciation: office equipment		750
Rent expense (1200/4)	300
Prepaid expense		300
Insurance expense (270/5)	54
Unexpired insurance		54
Salaries expense	2000
Salaries payable		2000
Interest expense (9000*8%/12)	60
Interest payable		60
Income tax expense	100
Income tax payable		100
Note:
It has been mentioned that adjustment entries have been monthly.
Hence, adjustment entries are made only for December.
CLOSING ENTRIES:
Consulting services revenue	69000
Income summary		69000
Income summary	51109
Office supplies expense		700
Depreciation expense: office equipment		9000
Rent expense		3825
Insurance expense		1064
Salaries expense		29100
Interest expense		420
Income taxes expense		7000
Income summary	17891
Retained earnings		17891
Retained earnings	1000
Dividend		1000