Question

The following is the Bravo Unlimited unadjusted Trial Balance.

Bravo Unlimited
Unadjusted Trial Balance
December 31, 2016
Account Title	Debit	Credit
Cash	$88,450
Accounts Receivable	331,860
Supplies	7,255
Prepaid Rent	16,000
Equipment	295,285
Accumulated Depreciation		$224,260
Accounts Payable		78,555
Wages Payable		0
Capital Stock		220,000
Retained Earnings		111,145
Service Revenue		893,105
Interest Income		1,500
Rent Expense	60,500
Wages Expense	527,260
Supplies Expense	42,520
Utilities Expense	8,595
Depreciation Expense	144,000
Interest Expense	6,840	________
Totals	$1,528,565	$1,528,565

Adjusting Items:

1. The prepaid rent covers December 2016 thru March 2017 rents.

2. December depreciation on equipment is $14,500 per month.

3. At year end Wages of $15,000 were earned but unpaid.

Bravo prepares monthly adjusting entries. Use this information to determine the adjusted account balances for the following:

1. Cash

2. Prepaid Rent

3. Equipment

4. Accumulated Depreciation

5. Wages Payable

6. Rent Expense

7. Wages Expense

8. Depreciation Expense

Answer 1

Prepaid rent $16,000 covers December 2016 thru March 2017 rents.

Rent expense for 1 month of December = 16,000/4

= $4,000

Prepaid rent on December 31 = 16,000 - 4,000

= $12,000

December depreciation on equipment = $14,500

Depreciation Expense = 144,000 + 14,500

= $158,500

Accumulated Depreciation = 224,260 + 14,500

= $238,760

Wages Expense = Wages paid + Wages payable

= 527,260 + 15,000

= $542,260

1. Cash = $88,450

2. Prepaid Rent = $12,000

3. Equipment = $295,285

4. Accumulated Depreciation = $238,760

5. Wages Payable = $15,000

6. Rent Expense = 60,500 + 4,000

= $64,500

7. Wages Expense = $542,260

8. Depreciation Expense = $158,500