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Chapter 3: Q 37PGA-1 (page 173)

Greavy Theater Production Company鈥檚 partially completed worksheet as of December 31, 2018, follows. Adjustment data at December 31 follow: a. As of December 31, Greavy had performed \(500 of service revenue but has not yet billed customers. b. At the end of the month, Greavy had \)700 of office supplies remaining. c. Prepaid Insurance of \(3,900 remained. d. Depreciation expense, \)4,000. e. Accrued salaries expense of $200 that hasn鈥檛 been paid yet. Requirements 1. Complete the worksheet. Use letters a through e to label the five adjustments. 2. Journalize the adjusting entries.

Short Answer

Expert verified

Worksheet is as follows:

GREAVY THEATER PRODUCTION COMPANY
Worksheet
December 31, 2018









Account NamesUnadjusted Trial Balance
AdjustmentsAdjusted Trial Balance
Debit
Credit

Debit
Credit

Debit
Credit

Cash

$4,300

$4,300

Accounts Receivable

5,900

(a)

$500

6,400

Office Supplies

1,900

$1,200

(b)

700

Prepaid Insurance

4,550

650

(c)

3,900

Equipment

30,000

30,000

Accumulated Depreciation鈥擡quipment

$7,600

4,000

(d)

11,600

Accounts Payable

3,600

3,600

Salaries Payable

$200

(e)

200

Common Stock

21,950

21,950

Dividends

30,500

30,500

Service Revenue

77,000

500

(a)

77,500

Depreciation Expense鈥擡quipment

(d)

4,000

4,000

Supplies Expense

(b)

1,200

1,200

Utilities Expense

5,500

5,500

Salaries Expense

27,500

(e)

200

27,700

Insurance Expense

(c)

650

650

Total

$110,150

$110,150

$6,550

$6,550

$114,850

$114,850

Step by step solution

01

Step-by-Step-SolutionStep 1: Calculation of Supplies Expense

Supplies expense is calculated as follows:

SuppliesExpense=UnadjustedBalance-EndingBalance=$1,900-$700=$1,200

02

Calculation of Insurance Expense

Insurance expense is calculated as follows:

InsuranceExpense=UnadjustedBalancePrepaidInsurance-EndingBalance=$4,550-$3,900=$650

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Most popular questions from this chapter

Question :The worksheet of Macey鈥檚 Landscaping Services follows but is incomplete.Requirements 1. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 2. Describe each adjusting entry. For example, a. Prepaid rent expires, $1,150.

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

Question :At the beginning of the year, office supplies of \(1,200 were on hand. During the year, Tempo Air Conditioning Service paid \)4,000 for more office supplies. At the end of the year, Tempo has $800 of office supplies on hand. Requirements 1. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an asset account. Post the adjusting entry to the Office Supplies and Supplies Expense T-accounts. Make sure to include the beginning balance and purchase of office supplies in the Office Supplies T-account. 2. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an expense account. Post the adjusting entry to the Office Supplies and Supplies Expense T-accounts. Make sure to include the beginning balance in the Office Supplies T-account and the purchase of office supplies in the Supplies Expense T-account. 3. Compare the ending balances of the T-accounts under both approaches. Are they the same?

Question :At the beginning of the year, office supplies of \(1,200 were on hand. During the year, Tempo Air Conditioning Service paid \)4,000 for more office supplies. At the end of the year, Tempo has $800 of office supplies on hand. Requirements 1. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an asset account. Post the adjusting entry to the Office Supplies and Supplies Expense T-accounts. Make sure to include the beginning balance and purchase of office supplies in the Office Supplies T-account. 2. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an expense account. Post the adjusting entry to the Office Supplies and Supplies Expense T-accounts. Make sure to include the beginning balance in the Office Supplies T-account and the purchase of office supplies in the Supplies Expense T-account. 3. Compare the ending balances of the T-accounts under both approaches. Are they the same?
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