126) Prepare the necessary adjusting entries on December 31, 2010, based on the following unadjusted and adjusted trial balances.
Peanut Butter & Jam Inc.
Unadjusted Trial Balance
December 31, 2010
DebitCredit
Cash$25,500
Accounts receivable15,000
Supplies4,500
Prepaid insurance5,000
Equipment89,000
Accumulated depreciation-equipment$6,000
Accounts payable1,800
Unearned service revenue3,700
Common shares93,200
Retained earnings21,000
Service revenue30,700
Utilities expense5,800
Salary expense 9,900
Advertising expense 1,700________
$156,400$156,400
Peanut Butter & Jam Inc.
Adjusted Trial Balance
December 31, 2010
DebitCredit
Cash$25,500
Accounts receivable15,000
Supplies3,000
Prepaid insurance4,200
Equipment89,000
Accumulated depreciation-equipment$6,600
Accounts payable1,800
Salary payable1,200
Unearned service revenue2,500
Common shares93,200
Retained earnings21,000
Service revenue31,900
Utilities expense5,800
Supplies expense1,500
Salary expense11,100
Insurance expense800
Depreciation expense-equipment600
Advertising expense 1,700________
$158,200$158,200
127) State the effect on net income, total assets, total liabilities, and shareholders' equity if the following adjustments are
omitted
by completing the chart below.
a.Utilities expense incurred but not yet paid, $350.
b.Supplies used during the current period, $650.
c.Service revenue earned, but not yet collected, $4,500.
d.Unearned revenue earned during the period, $900.
e.Depreciation on equipment, $2,600.
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Net Income
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Total Assets
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Total Liabilities
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Shareholders' Equity
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a.
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b.
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c.
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d.
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e.
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128) The December 31, 2010, trial balance of Pilsner Inc. included the following selected accounts:
Accounts receivable$176,000
Unearned service revenue24,000
Prepaid rent69,000
Prepaid insurance36,000
Equipment280,000
Accumulated depreciation-equipment 30,000
Salary expense130,000
Additional data:
?One-third of the revenue received in advance has been earned by December 31, 2010.
?The prepaid insurance represents the annual premium on a policy providing coverage starting September 1, 2010.
?Since the last payday, employees have earned an additional $2,500 which has not yet been paid or recorded.
?The equipment has an estimated life of 10 years and no expected value at the end of its life.
?Services performed but unbilled and uncollected at year end amount to $6,500.
?The prepaid rent relates to one-half of a year beginning on October 1, 2010.
Prepare the necessary year-end adjusting entries as of December 31, 2010.