The Wheel Place Inc. began operations on March 1 of the current year to provide automotive wheel alignment and balancing services. On March 31 the unadjusted balances of the firm's accounts are as follows:
The Wheel Place Inc.
Trial Balance
March 31, 2010
DR CR
Cash$ 2,900
Accounts Receivable 4,350
Supplies 0
Prepaid Rent 4,000
Equipment 25,100
Accumulated Depreciation – Equipment$ 0
Accounts Payable 2,400
Unearned Service Revenue 700
Capital Stock 29,000
Service Revenue 10,550
Depreciation Expense – Equipment 0
Rent Expense 0
Supplies Expense 2,600
Wages Expense 3,700_______
$ 41,850 $ 41,850
The following information is also available:
1)The balance in Prepaid Rent was the amount paid on March 1 to cover the first four months rent.
2)Supplies on hand on March 31 amount to $1,200.
3)The equipment has an estimated life of seven years with a salvage value of $2,000.
4)The company has 3 employees who in total are paid 3,750 for the week. March 31, 2010 falls on a Wednesday.
5)Utility services used during March were estimated at $480. A bill is expected early in April.
6)The balance in Unearned Service Revenue was the amount received on March 15 from a new car dealer to cover alignment and balancing services on all new cars sold by thedealer in March and April. Wheel Place agreed to provide the service at a fixed fee of $350 each month.
REQUIRED:
a) Prepare the necessary adjusting entries at March 31, 2010 for the addition information given
b)Prepare the journal entry on April 2, 2010 to record the payment of the wages to the employees listed in information item #4 above. (assume the company does not use reversing entries)