Prepare Adjusted Journal Entries And Adjusted Trial Balance

Question

 

Comprehensive Problem Inc. Trial Balance June 30, 2012
Cash	$18,470
A/R	14,333
Advertising Supplies	3,998
Prepaid Insurance	23,137
Equipment	135,495
A/D – Equipment		$19,207
Accounts Payable		11,998
Unearned Service Revenue		14,336
Notes Payable		62,679
Common Stock		67,546
Retained Earnings		19,667
Totals	$195,433	$195,433

During the month of July, the following occurred:

July 2   received $8,127 of the prior month’s receivables

July 3   paid $5,220 of the prior month’s accounts payable and paid $3,200 for July rent

July 5   earned $6,736 worth of the prior month’s unearned revenue

July 6   provided a service and billed the client $3,376

July 9   bought advertising supplies for $2,217 on account

July 10 received $4,200 for a service to be provided

July 11 provided a service and billed the client $7,366

July 12 collected $9,127 of receivables

July 13 paid $7,500 of the notes payable

July 16 bought advertising supplies for $1,189 cash

July 18 provided a service and billed the client $4,934

July 20 received $2,700 for a service to be provided 

July 23 paid $4,223 travel expense (all for July travel)

July 24 paid $2,400 of accounts payable

July 25 paid temporary employees $3,356 of wages (all for July work)

July 26 paid $5,000 of the notes payable

July 27 paid the shareholder a $3,000 dividend

July 30 provided a service fully earning the $4,200 from July 10

July 31 paid the shareholder a $4,500 dividend

Required – Part A

Part A1  provide general journal entries in general journal form for the above transactions

Part A2  create a trial balance at July 31 fully taking into account the beginning balances and the general journal entries recorded in part A1 (t-accounts are recommended for key accounts; do not hand them in t-accounts)

Adjusting Entry Information

1. the insurance expires at a rate of $1,218 per month
2. a month-end count reveals about $2,400 of advertising supplies remain on-hand
3. annual depreciation (straight-line is used) is $19,356
4. a thorough analysis reveals only $3,200 of the unearned revenue is not yet earned at month-end
5. the interest on the N/P for the month is $418 (hint: don’t increase the principal of the note)
6. estimated expenses for the month are $2,100 utilities and $800 telephone
7. a bank reconciliation reveals that a $4,000 payment from a client (A/R) was not recorded

Required – Part B

Part B1  provide adjusting journal entries, in general journal form, for the above

Part B2  create an adjusted trial balance

Part B3  create an income statement and a statement of retained earnings for the month of July

Part B4  create a balance sheet at 7/31/12

Part B5  provide closing entries in general journal form

 

Summary

The question belongs to Accounting and it discusses about preparing journal entries and providing adjusting entries and creating an adjusted trial balance.

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