Question

The Adjusting Process 167 Learning Objectives 3, 4 P3-35A Journalizing and posting adjustments to the T-accounts and preparing an adjusted trial balance The unadjusted trial balance of Anniston Air Purification System at December 31, 2018, and the data needed for the adjustments follow 3. Adjusted trial balance total $75,600 ANNISTON AIR PURIFICATION SYSTEM Unadjusted Trial Balance December 31, 2018 Balance Debit Credit $ 7.500 19,700 2.900 1,800 22.000 $ 3,900 CHAPTER 3 2.500 Account Title Cash Accounts Receivable Prepaid Rent Office Supplies Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Unearned Revenue Anniston, Capital Anniston, withdrawals Service Revenue Salaries Expense Rent Expense Depreciation Expense-Equipment Advertising Expense Supplies Expense Total 2,100 43,800 1,300 Adjustment data at December 31 follow: a. On December 15, Anniston contracted to perform services for a client receiving $3,100 in advance. Anniston recorded this receipt of cash as Unearned Revenue. As of December 31, Anniston has completed $2,100 of the services. b. Anniston prepaid two months of rent on December 1. (Assume the Prepaid Rent balance as shown on the unadjusted trial balance represents the two months of rent prepaid on December 1.) c. Anniston used $750 of office supplies d. Depreciation for the equipment is $850. e. Anniston received a bill for December's online advertising, $1,100. Anniston will not pay the bill until January (Use Accounts Payable.) f. Anniston pays its employees on Monday for the previous week's wages. Its employees cam $3,500 for a five-day workweek. December 31 falls on Wednesday this year. On October 1, Anniston agreed to provide a four-month air system check (beginning October 1) for a customer for $3,400. Anniston has completed the system check every month, but payment has not yet been received and no entries have been made.

Answer 1

Adjusting entries:

	Date	Account title and explanation	Debit	Credit
a	Dec 31	Unearned revenue	$2,100
		Service revenue		$2,100
		[To record service revenue from unearned]
b	Dec 31	Rent expense [2,900/2]	$1,450
		Prepaid rent		$1,450
		[To record rent expense]
c	Dec 31	Supplies expense	$750
		Office supplies		$750
		[To record office supplies expense]
d	Dec 31	Depreciation expense-Equipment	$850
		Accumulated depreciation-Equipment		$850
		[To record depreciation expense]
e	Dec 31	Advertising Expense	$1,100
		Accounts payable		$1,100
		[To record advertisement expense]
f	Dec 31	Salaries expense [3,500 x 3/5]*	$2,100
		Salaries payable		$2,100
		[To record accrued salaries]
g	Dec 31	Accounts receivable	$2,250
		Service revenue (3,400 x 3 months / 4 months)		$2,250
		[To record services performed on account]

*3 Days [Mon to Wed] salaries expense is accrued

T-Accounts:

Cash					Anniston, Capital
Beg.	$7,600						Beg.	43800
Accounts receivable					Anniston, withdrawals
Beg.	19700				Beg.	9900
g	2250				Service revenue
End.	21950						Beg.	15300
Prepaid Rent							a	2100
Beg.	2900	b	1450				g	2250
End.	1450						End.	19650
Office supplies					Salaries expense
Beg.	1800	c	750		Beg.	3300
End.	1050				f	2100
Equipment					End.	5400
Beg.	22000				Rent expense
Accumulated depreciation-Equipment					Beg.	0
		Beg.	3900		b	1450
		d	850		End.	1450
		End.	4750		Depreciation Expense-Equipment
Accounts payable					Beg.	0
		Beg.	2900		d	850
		e	1100		End.	850
		End.	4000		Advertising Expense
Salaries payable					Beg.	1800
		Beg.	0		e	1100
		f	2100		End.	2900
		End.	2100		Supplies Expense
Unearned revenue					Beg.	0
a	2100	Beg.	3100		c	750
		End.	1000		End.	750

Adjusted Trial Balance:

ANNISTON AIR PURIFICATION SYSTEM
Adjusted Trial Balance
Dec 31,2018
Account title	Debit	Credit
Cash	$7,600
Accounts receivable	$21,950
Prepaid Rent	$1,450
Office supplies	$1,050
Equipment	$22,000
Accumulated depreciation-Equipment		$4,750
Accounts payable		$4,000
Salaries payable		$2,100
Unearned revenue		$1,000
Anniston, Capital		$43,800
Anniston, withdrawals	$9,900
Service reveue		$19,650
Salaries payable	$5,400
Rent expense	$1,450
Depreciation Expense-Equipment	$850
Advertising Expense	$2,900
Supplies Expense	$750
Total	$75,300	$75,300