Len Edward started his own consulting firm, Edward Consulting, on June 1, 2022. The trial balance...
Len Edward started his own consulting firm, Edward Consulting,
on June 1, 2022. The trial balance at June 30 is as
follows.
| EDWARD
CONSULTING Trial Balance June 30, 2022 |
||||
|---|---|---|---|---|
| Debit | Credit | |||
|
Cash |
$ 6,850 | |||
|
Accounts Receivable |
7,000 | |||
|
Supplies |
2,002 | |||
|
Prepaid Insurance |
3,900 | |||
|
Equipment |
15,000 | |||
|
Accounts Payable |
$ 4,250 | |||
|
Unearned Service Revenue |
5,200 | |||
|
Common Stock |
22,002 | |||
|
Service Revenue |
8,300 | |||
|
Salaries and Wages Expense |
4,000 | |||
|
Rent Expense |
1,000 |
|
||
|
$39,752 |
$39,752 |
|||
In addition to those accounts listed on the trial balance, the
chart of accounts for Edward also contains the following accounts:
Accumulated Depreciation—Equipment, Salaries and Wages Payable,
Depreciation Expense, Insurance Expense, Utilities Expense, and
Supplies Expense.
Other data:
| 1. | Supplies on hand at June 30 total $720. | |
| 2. | A utility bill for $260 has not been recorded and will not be paid until next month. | |
| 3. | The insurance policy is for a year. | |
| 4. | Services were performed for $4,170 of unearned service revenue by the end of the month. | |
| 5. | Salaries of $1,360 are accrued at June 30. | |
| 6. | The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months. | |
| 7. | Invoices representing $4,200 of services performed by Edward during the month have not been recorded as of June 30. |
Prepare the adjusting entries for the month of June. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. (Use T-Accounts.) (Post entries in the order of journal entries presented in the previous question.)
Prepare an adjusted trial balance at June 30, 2022.
Homework Answers
Solution:
Part 1 – Journal Entry
|
Date |
General Journal |
Debit |
Credit |
|
June.30 |
Supplies Expense (2,002 - 720) |
$1,282 |
|
|
Supplies |
$1,282 |
||
|
(To record supplies expense for June) |
|||
|
June.30 |
Utilities Expense |
$260 |
|
|
Accounts Payable |
$260 |
||
|
(to record utility expense for the month) |
|||
|
June.30 |
Insurance Expense (3900 / 12) |
$325 |
|
|
Prepaid Insurance |
$325 |
||
|
(To record insurance expense for the month) |
|||
|
June.30 |
Unearned Service Revenue |
$4,170 |
|
|
Service Revenue |
$4,170 |
||
|
(To record service revenue) |
|||
|
June.30 |
Salaries and Wages Expense |
$1,360 |
|
|
Salaries and Wages Payable |
$1,360 |
||
|
(to record salaries and wages expense for the month) |
|||
|
June.30 |
Depreciation Expense |
$250 |
|
|
Accumulated Depreciation—Equipment |
$250 |
||
|
(To record depreciation expense for the month) |
|||
|
June.30 |
Accounts Receivable |
$4,200 |
|
|
Service Revenue |
$4,200 |
||
|
(to record service revenue for the month) |
Part 2 – Ledger Accounts
|
Accounts Receivable |
Accumulated Depreciation - Equipment |
|||||||
|
Debit |
Credit |
Debit |
Credit |
|||||
|
Beg. Bal. |
7,000 |
Beg. Bal. |
0 |
|||||
|
7) |
4,200 |
6) |
250 |
|||||
|
Supplies |
Unearned Service Revenue |
|||||||
|
Debit |
Credit |
Debit |
Credit |
|||||
|
Beg. Bal. |
2,002 |
beg. Bal. |
5200 |
|||||
|
1) |
1282 |
4) |
4,170 |
|||||
|
End. Bal. |
720 |
|||||||
|
Prepaid Insurance |
Accounts Payable |
|||||||
|
Debit |
Credit |
Debit |
Credit |
|||||
|
Beg. Bal. |
3,900 |
Beg. Bal. |
4250 |
|||||
|
3) |
325 |
2) |
260 |
|||||
|
Service Revenue |
Salaries and Wages Expense |
|||||||
|
Debit |
Credit |
Debit |
Credit |
|||||
|
Beg. Bal. |
8,300 |
Beg. Bal. |
- |
|||||
|
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KUMAR CONSULTING
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June 30, 2017
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Credit
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Accounts Receivable
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Supplies
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Prepaid Insurance
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Equipment
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