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Chapter 3: Q37PGA-2 (page 173)

Question :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

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Answer:

Worksheet is as follows:

GREAVY THEATER PRODUCTION COMPANY
WORKSHEET
December 31, 2018









Account NameUnadjusted Trial Balance
Adjustments

Adjusted 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

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 accounting records of Mackay Architects include the following selected, unadjusted balances at March 31: Accounts Receivable, \(1,500; Office Supplies, \)700; Prepaid Rent, \(2,240; Equipment, \)8,000; Accumulated Depreciation鈥擡quipment, \(0; Salaries Payable, \)0; Unearned Revenue, \(900; Service Revenue, \)4,100; Salaries Expense, \(800; Supplies Expense, \)0; Rent Expense, \(0; Depreciation Expense鈥擡quipment, \)0. The data developed for the March 31 adjusting entries are as follows: a. Service revenue accrued, \(700. b. Unearned revenue that has been earned, \)100. c. Office Supplies on hand, \(300. d. Salaries owed to employees, \)200. e. One month of prepaid rent has expired, \(560. f. Depreciation on equipment, \)120. Requirements 1. Open a T-account for each account using the unadjusted balances given. 2. Journalize the adjusting entries using the letter and March 31 date in the date column. 3. Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account鈥檚 adjusted balance.

Question: Match the accounting terminology to the definitions. 3. Time period concept 4. Revenue recognition principle 5. Matching principle a. Requires companies to record revenue when it satisfies each performance obligation. b. Assumes that a business鈥檚 activities can be sliced into small time segments and that financial statements can be prepared for specific periods. c. Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period

Question: Match the accounting terminology to the definitions. 3. Time period concept 4. Revenue recognition principle 5. Matching principle a. Requires companies to record revenue when it satisfies each performance obligation. b. Assumes that a business鈥檚 activities can be sliced into small time segments and that financial statements can be prepared for specific periods. c. Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period

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
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