Question

Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services’ accounting clerk prepared the following unadjusted trial balance at July 31, 20Y9:

Reece Financial Services Co.
Unadjusted Trial Balance
July 31, 20Y9
	Debit Balances		Credit Balances
Cash	4,000
Accounts Receivable	36,290
Prepaid Insurance	6,770
Supplies	1,850
Land	106,720
Building	192,490
Accumulated Depreciation—Building			130,410
Equipment	128,250
Accumulated Depreciation—Equipment			92,880
Accounts Payable			11,380
Unearned Rent			6,460
Common Stock			80,000
Retained Earnings			129,100
Dividends	14,150
Fees Earned			307,560
Salaries and Wages Expense	183,310
Utilities Expense	40,290
Advertising Expense	21,530
Repairs Expense	16,300
Miscellaneous Expense	5,840
	757,790		757,790

The data needed to determine year-end adjustments are as follows:

• Depreciation of building for the year, $3,000.
• Depreciation of equipment for the year, $2,600.
• Accrued salaries and wages at July 31, $2,930.
• Unexpired insurance at July 31, $4,540.
• Fees earned but unbilled on July 31, $17,220.
• Supplies on hand at July 31, $560.
• Rent unearned at July 31, $1,680.

Required:

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. If an amount box does not require an entry, leave it blank.

July 31
31
31
31
31
31
31

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

Reece Financial Services Co.
Adjusted Trial Balance
July 31, 20Y9
	Debit Balances	Credit Balances
Totals

Answer 1

Date	Accounts Titles and Explantions	Debit (in $)	Credit (in $)
Jul-31	Depreciation expense	$ 3,000
	Accumlated Depreciation - Building		$ 3,000
Jul-31	Depreciation expense	$ 2,600
	Accumlated Depreciation - Equipment		$ 2,600
Jul-31	Salary and Wages expenses	$ 2,930
	Salary and Wages payable		$ 2,930
Jul-31	Insurance Expenses ( $6,770 (-) $ 4,540)	$ 2,230
	Prepaid insurance		$ 2,230
Jul-31	Account receivable	$ 17,220
	Service revenue (or) Fees Earned		$ 17,220
Jul-31	Supplies expenses ( $ 1,850 (-) $ 560)	$ 1,290
	Supplies		$ 1,290
Jul-31	Unearned Rent ( $ 6,460 (-) $ 1,680)	$ 4,780
	Rent revenue		$ 4,780

Adjusted trial balance after Adjusting Entries are Made
Accounts Titles	Debit Balances	Credit Balances
Cash	$ 4,000
Account receivable ($36,290 + $17,220)	$ 53,510
Prepaid insurance	$ 4,540
Supplies	$ 560
Land	$ 106,720
Building	$ 192,490
Accumlated depreciation-Building ( $130,410 + $ 3,000)		$ 133,410
Equipment	$ 128,250
Accumlated depreciation- Equipment ( $ 92,880 + $ 2,600)		$ 95,480
Account payable		$ 11,380
Unearned rent		$ 1,680
Salaries and wages payable		$ 2,930
Common stock		$ 80,000
Retained earning		$ 129,100
Dividend	$ 14,150
Fees earned ( $ 307,560 + $ 17,220)		$ 324,780
Rent revenue		$ 4,780
Salaries and wages expenses ( $183,310 + $ 2,930)	$ 186,240
Utitlies exp	$ 40,290
Advertising Expense	$ 21,530
Repairs Expense	$ 16,300
Miscellaneous Expense	$ 5,840
Depreciation expense - Building	$ 3,000
Depreciation expense - Equipment	$ 2,600
Insurnace exp	$ 2,230
Supplies exp	$ 1,290
TOTAL	$ 783,540	$ 783,540