Question 3.IP: Three years ago, T. Roderick organized Harbor Realty. At Jul......
Three years ago, T. Roderick organized Harbor Realty. At July 31, 2012, the end of the current year, the unadjusted trial balance of Harbor Realty appears as shown below.
The data needed to determine year-end adjustments are as follows:
a. Supplies on hand at July 31, 2012, $380.
b. Insurance premiums expired during the year, $315.
c. Depreciation of equipment during the year, $4,950.
d. Wages accrued but not paid at July 31, 2012, $440. e. Accrued fees earned but not recorded at July 31, 2012, $1,000.
f. Unearned fees on July 31, 2012, $750.
Instructions
1. Prepare the necessary adjusting journal entries. Include journal entry explanations.
2. Determine the balance of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.
| Harbor Realty Unadjusted Trial Balance July 31, 2012 |
||
| Debit Balances | Credit Balances | |
| Cash | 3,425 | |
| Accounts Receivable | 7,000 | |
| Supplies | 1,270 | |
| Prepaid Insurance | 620 | |
| Office Equipment | 51,650 | |
| Accumulated Depreciation—Office Equipment | 9,700 | |
| Accounts Payable | 925 | |
| Wages Payable | 0 | |
| Unearned Fees | 1,250 | |
| T. Roderick, Capital | 29,000 | |
| T. Roderick, Drawing | 5,200 | |
| Fees Earned | 59,125 | |
| Wages Expense | 22,415 | |
| Depreciation Expense | 0 | |
| Rent Expense | 4,200 | |
| Utilities Expense | 2,715 | |
| Supplies Expense | 0 | |
| Insurance Expense | 0 | |
| Miscellaneous Expense | \underline{1,505} | \underline{ } |
| \underline{100,000} | \underline{100,000} | |
1.
| Journal | |||||
| Date | Description | Post. Ref. |
Debit | Credit | |
| 2012 July |
31 | Supplies Expense | 890 | ||
| Supplies | 890 | ||||
| Supplies used ($1,270 – $380). | |||||
| 31 | Insurance Expense | 315 | |||
| Prepaid Insurance | 315 | ||||
| Insurance expired. | |||||
| 31 | Depreciation Expense | 4,950 | |||
| Accumulated Depreciation—Office Equipment | 4,950 | ||||
| Depreciation expense. | |||||
| 31 | Wages Expense | 440 | |||
| Wages Payable | 440 | ||||
| Accrued wages. | |||||
| 31 | Accounts Receivable | 1,000 | |||
| Fees Earned | 1,000 | ||||
| Accrued fees. | |||||
| 31 | Unearned Fees | 500 | |||
| Fees Earned | 500 | ||||
| Fees earned ($1,250 – $750). | |||||
2.
| Harbor Realty Adjusted Trial Balance July 31, 2012 |
||
| Debit Balances | Credit Balances | |
| Cash | 3,425 | |
| Accounts Receivable | 8,000 | |
| Supplies | 380 | |
| Prepaid Insurance | 305 | |
| Office Equipment | 51,650 | |
| Accumulated Depreciation—Office Equipment | 14,650 | |
| Accounts Payable | 925 | |
| Wages Payable | 440 | |
| Unearned Fees | 750 | |
| T. Roderick, Capital | 29,000 | |
| T. Roderick, Drawing | 5,200 | |
| Fees Earned | 60,625 | |
| Wages Expense | 22,415 | |
| Depreciation Expense | 4,950 | |
| Rent Expense | 4,200 | |
| Utilities Expense | 2,715 | |
| Supplies Expense | 890 | |
| Insurance Expense | 315 | |
| Miscellaneous Expense | \underline{1,505} | \underline{ } |
| \underline{\underline{106,390}} | \underline{\underline{106,390}} | |