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Chapter 3: Q41PGB-3 (page 176)

The unadjusted trial balance of Avery Air Purification System at December 31, 2018, and the data needed for the adjustments follow. Account Title Prepaid Rent Cash Debit Credit Accounts Receivable Office Supplies Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Salaries Payable Unearned Revenue Common Stock Dividends Service Revenue Salaries Expense Rent Expense Depreciation Expense鈥擡quipment Advertising Expense Supplies Expense Total Balance \( 7,100 \) 65,200 \( 65,200 20,000 39,300 2,700 15,900 19,100 2,400 1,400 \) 3,800 3,500 9,400 3,900 1,900 Adjustment data at December 31 follow: a. On December 15, Avery contracted to perform services for a client receiving \(2,700 in advance. Avery recorded this receipt of cash as Unearned Revenue. As of December 31, Avery has completed \)2,100 of the services. b. Avery prepaid two months of rent on December 1. (Assume the Prepaid Rent balance as shown on the unadjusted trial balance represents the two months of rent prepaid on December 1.) c. Avery used \(750 of office supplies during the month. d. Depreciation for the equipment is \)800. e. Avery received a bill for December鈥檚 online advertising, \(500. Avery will not pay the bill until January. (Use Accounts Payable.) f. Avery pays its employees weekly on Monday for the previous week鈥檚 wages. Its employees earn \)2,000 for a five-day workweek. December 31 falls on Wednesday this year. g. On October 1, Avery agreed to provide a four-month air system check (beginning October 1) for a customer for $2,800. Avery has completed the system check every month, but payment has not yet been received and no entries have been made. Requirements 1. Journalize the adjusting entries on December 31. 2. Using the unadjusted trial balance, open the T-accounts with the unadjusted balances. Post the adjusting entries to the T-accounts. 3. Prepare the adjusted trial balance. 4. How will Avery Air Purification System use the adjusted trial balance?

Short Answer

Expert verified

Adjusted trial balance is shown as follows:

AVERY AIR PURIFICATION SYSTEM

Adjusted Trial Balance

December 31, 2018

Balance

Account Title

Debit

Credit

Cash

$7,100

Accounts Receivable

21,200

Prepaid Rent

1,200

Office Supplies

650

Equipment

20,000

Accumulated Depreciation鈥擡quipment

$4,600

Accounts Payable

4,000

Salaries Payable

1,200

Unearned Revenue

600

Common Stock

39,300

Dividends

9,400

Service Revenue

20,100

Salaries Expense

5,100

Rent Expense

1,200

Depreciation Expense鈥擡quipment

800

Advertising Expense

2,400

Supplies Expense

750

Total

$69,800

$69,800

Step by step solution

01

Definition of Adjusted Trial Balance

After the adjusting entries are recorded, it is posted into the ledger account, then the balance of these account is used to prepare adjusted trial balance.

02

Explanation on Trial Balance

In case of all mopped up company, the debit and credit balance equal $69,800 in adjusted trial balance.

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Most popular questions from this chapter

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Question :The unadjusted trial balance for All Mopped Up Company, a cleaning service, is as follows:ALL MOPPED UP COMPANY Unadjusted Trial Balance December 31, 2018 Account Title Prepaid Insurance Cash Debit Credit Office Supplies Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Salaries Payable Unearned Revenue Common Stock Dividends Service Revenue Salaries Expense Supplies Expense Depreciation Expense鈥擡quipment Insurance Expense Total Balance \( 800 \) 45,400 \( 45,400 \) 2,000 15,300 25,000 2,000 600 30,000 2,400 700 5,000 7,000 A, During the 12 months ended December 31, 2018, All Mopped Up: a. used office supplies of \(1,700. b. used prepaid insurance of \)580. c. depreciated equipment, \(500. d. accrued salaries expense of \)310 that hasn鈥檛 been paid yet. e. earned $400 of unearned revenue. Requirements 1. Open a T-account for each account using the unadjusted balances. 2. Journalize the adjusting entries using the letter and December 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.
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