Question

Enviro Waste’s year end is December 31. The information in (a) to (e) is available at year-end for the preparation of adjusting entries:

1. The Unearned Revenue account has a balance of $18,500. On December 31, $2,500 remains unearned.
2. The annual building depreciation is $10,500.
3. The Spare Parts on hand account shows an unadjusted balance of $450. A physical count reveals a balance on hand of $100.
4. Unbilled and uncollected services provided to customers totalled $3,550.
5. The utility bill for the month of December was received but is unpaid; $1,300.

     Prepare the required adjusting entries at December 31, 2019, for (a) to (e).

Answer 1

	Adjusting entries
31-Dec	Unearned Revenue(18500-2500)	16,000
	Service revenue		16,000
31-Dec	Depreciation expense	10,500
	Accumulated depreciation-Building		10,500
31-Dec	Cost of goods sold(450-100)	350
	Inventory		350
31-Dec	Accounts receivable	3,550
	Service revenue		3,550
31-Dec	Utilities expense	1,300
	Accounts payable		1,300