Reece Financial Services Co. Unadjusted Trial Balance July 31, 2019, Debit Balances Credit Balances Cash 10,200 Accounts Receivable 34,750 Prepaid Insurance 6,000 Supplies 1,725 Land 50,000 Building 155,750 Accumulated Depreciation—Building 62,850 Equipment 45,000 Accumulated Depreciation—Equipment 17,650 Accounts Payable 3,750 Unearned Rent 3,600 Joni Reece, Capital 153,550 Joni Reece, Drawing 8,000 Fees Earned 158,600 Salaries and Wages Expense 56,850 Utilities Expense 14,100 Advertising Expense 7,500 Repairs Expense 6,100 Miscellaneous Expense 4,025 400,000 400,000 The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, $6,400. Depreciation of equipment for the year, $2,800. Accrued salaries and wages on July 31, $900. Unexpired insurance on July 31, $1,500. Fees earned but unbilled on July 31, $10,200. Supplies on hand at July 31, $615. Rent unearned on July 31, $300.
The data needed to determine year-end adjustments are as follows:
Depreciation of building for the year, $6,400.
Depreciation of equipment for the year, $2,800.
Accrued salaries and wages on July 31, $900.
Unexpired insurance on July 31, $1,500.
Fees earned but unbilled on July 31, $10,200.
Supplies on hand at July 31, $615.
Rent unearned on July 31, $300.
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

Reece Financial Services Co.

1. Journal for Adjusting Entries:

                                                                         Debit                Credit

a) Depreciation Expense - Building                $6,400

       Accumulated Depreciation - Building                             $6,400

To record depreciation expense for the year.

                                                                      Debit                Credit

b) Depreciation Expense - Equipment        $2,800

       Accumulated Depreciation - Equipment                      $2,800

To record depreciation expense for the year.

                                                                      Debit                Credit

c) Salaries and Wages                                   $900

      Salaries and Wages Payable                                           $900

To record accrued salaries on July 31

                                                                      Debit                Credit

d) Prepaid Insurance                                    $4,500

     Insurance Expense                                                          $4,500

To record unexpired insurance on July 31.

                                                                      Debit                Credit

e) Accounts Receivable                              $10,200

      Fees Earned                                                                   $10,200

To record fees earned but unbilled on July 31.

                                                                      Debit                Credit

f) Cost of Supplies                                        $1,110

  Supplies                                                                              $1,110

To record cost of supplies used                                    

g) Unearned Rent                                         $3,300

      Rent Received                                                               $3,300

To record rent received on July 31.

2a) Accounts Receivable

     As per Trial Balance =                                     $34,750

     add Fees Earned but not billed                   = $10,200

     Balance                                                          $44,950

2b)  Prepaid Insurance

     As per Trial Balance = $6,000

    less Insurance Exp.      $4,500

    Balance                         $1,500

2c)  Supplies

    As per Trial Balance = $1,725

    less Cost of Supplies = $1,110

    Ending Supplies        =  $615    

2d) Accumulated Depreciation - Building:

   As per Trial Balance = $62,850

   add Depreciation Exp    $6,400

   Balance                        $69,250

2e) Accumulated Depreciation - Equipment:

   As per Trial Balance  =  $17,650

   add Depreciation Exp    $2,800

   Balance                        $20,450

2f) Unearned Rent:

  As per Trial Balance = $3,600

  less Rent Received =  $3,300

  Balance                          $300

2g) Fees Earned:

   As per Trial Balance = $158,600

   add unbilled fees     =   $10,200

  Balance                         $168,800

2h) Salaries & Wages Expense:

   As per Trial Balance = $56,850

   add accrued salaries        $900

  Balance                        $57,750

2i) Adjusted Trial Balance:

                                                                      Debit                Credit

Cash                                                               $10,200

Accounts Receivable                                      44,950

Prepaid Insurance                                              1,500

Insurance Expense                                           4,500

Ending Supplies                                                    615

Cost of Supplies                                                  1,110

Land                                                                50,000

Building                                                          155,750

Accumulated Depreciation—Building                                      $69,250

Depreciation Expense - Building                     6,400

Equipment                                                      45,000

Accumulated Depreciation—Equipment                                   20,450

Depreciation Expense - Equipment                2,800

Accounts Payable                                                                         3,750

Unearned Rent                                                                                300

Rent Received                                                                               3,300

Joni Reece, Capital                                                                   153,550

Joni Reece, Drawing                                       8,000

Fees Earned                                                                              168,800

Salaries and Wages Expense                       57,750

Salaries and Wages Payable                                                          900

Utilities Expense                                            14,100

Advertising Expense                                      7,500

Repairs Expense                                            6,100

Miscellaneous Expense                                4,025

Total                                                         $420,300              $420,300

Explanation:

Adjusting entries are entries used to bring year-end balances to their accrued amounts, in accordance with the accrual concept and the matching principle of US GAAP.  These require that revenue, expenses, and other business transactions are attributed to the period when they occur and not when cash is received or paid.

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