Journalize the following adjustments. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 1,527.)1. Services performed for customers through February 27, 2022, but unbilled and uncollected were $3,120.2. Received notice that a customer who was billed $160 for services performed February 10 has filedfor bankruptcy. Sage Hill Cleaning Services does not expect to collect any portion of this outstanding receivable.3. Sage Hill Cleaning Services uses the allowance method to estimate bad debts. Sage Hill Cleaning Services estimates that 3%of its month-end receivables will not be collected.4. Record 1 month of depreciation for the floor equipment. Use the straight-line method, anestimated life of 4 years, and $410 salvage value.5. Record 1 month of insurance expense.6. An inventory count shows $330 of supplies on hand at February 28.7. One week of services were performed for the customer who paid in advance on February 17.8. Accrue for wages owed through February 28, 2022.9. Accrue for interest expense for 1 month.10. Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to “income beforetaxes” to help with the income tax calculation.) **SAGE HILL CLEANING SERVICES INC.****Trial Balance as of 2/28/22**| Account Name | Debit ($) | Credit ($) ||--------------------------------------------------------|-----------|------------|| Cash | 8,274 | || Accounts Receivable | 4,680 | || Supplies | 800 | || Prepaid Insurance | 2,018 | || Prepaid Expenses | 180 | || Equipment | 3,950 | || Accounts Payable | | 550 || Notes Payable | | 6,560 || Unearned Service Revenue | | 432 || Common Stock | | 6,150 || Paid-in Capital in Excess of Par Value-Common Stock | | 4,510 || Cash Dividends | 770 | || Treasury Stock | 750 | || Service Revenue | | 6,730 || Utilities Expense | 180 | || Salaries and Wages Expense | 3,120 | || Loss on Disposal of Plant Assets | 210 | || **Totals** | **24,932**| **24,932** |**Detailed Explanation:**1. **Trial Balance Overview:** - A trial balance is prepared to show that the total debits equal the total credits in the ledger accounts. It is a key step in the accounting cycle.2. **Debit and Credit Columns:** - The left column lists accounts with debit balances, while the right column shows accounts with credit balances.3. **Accounts and Balances:** - **Assets:** Include Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Expenses, and Equipment. - **Liabilities:** Include Accounts Payable, Notes Payable, and Unearned Service Revenue. - **Equity:** Include Common Stock, Paid-in Capital in Excess of Par Value, and Treasury Stock. - **Expenses and Dividends:** Include Cash Dividends, Utilities Expense, Salaries and Wages Expense, and Loss on Disposal of Plant Assets. - **Revenues:** Represented by Service Revenue.4. **Balancing Totals:** **Ledger Accounts Posting**Post to the ledger accounts. *(Post entries in the order of journal entries presented above.)***Cash:**- 2/21: Debit 10560, Credit 1740- 2/22: Credit 240- 2/23: Credit 200- 2/25: Credit 3240, Debit 200- 2/28: Debit 450, Credit 250- 2/28: Credit 720- 2/28: Balance 770**Accounts Receivable:**- 2/18: Debit 1235, Credit 2115- 2/23: Debit 3580**Supplies:**- 2/25: Debit 800**Prepaid Insurance:**- 2/28: Debit 2018**Prepaid Expenses:**- 2/27: Debit 180- 2/28: Credit 180**Equipment:**- 2/28: Debit 3460**Accounts Payable:**- 2/18: Credit 785, Debit 800**Notes Payable:**- 2/23: Credit 6500**Unearned Service Revenue:**- 2/27: Credit 432**Common Stock:**- 2/21: Credit 6150**Paid in Capital in Excess of Par:**- 2/21: Credit 4510**Cash Dividends:**- 2/28: Debit 270**Treasury Stock:**- 2/23: Debit 320**Service Revenue:**- 2/25: Credit 3200**Utilities Expense:**- 2/21: Debit 180**Salaries and Wages Expense:**- 2/23: Debit 350**Loss on Disposal of Plant Assets:**- 2/25: Debit 210---Each account is structured with date columns on the left, followed by the transaction type (debit or credit) and corresponding amounts. Balances are updated as per the final postings in the entries.

Adjusting entries: These entries are passed at the end of the year under the accrual based…

Journalize the following adjustments. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 1,527.) 1. Services performed for customers through February 27, 2022, but unbilled and uncollected were $3,120. 2. Received notice that a customer who was billed $160 for services performed February 10 has filed for bankruptcy. Sage Hill Cleaning Services does not expect to collect any portion of this outstanding receivable. 3. Sage Hill Cleaning Services uses the allowance method to estimate bad debts. Sage Hill Cleaning Services estimates that 3% of its month-end receivables will not be collected. 4. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $410 salvage value. 5. Record 1 month of insurance expense. 6. An inventory count shows $330 of supplies on hand at February 28. 7. One week of services were performed for the customer who paid in advance on February 17. 8. Accrue for wages owed through February 28, 2022. 9. Accrue for interest expense for 1 month. 10. Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to “income before taxes” to help with the income tax calculation.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Journalize the following adjustments. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 1,527.)

1.		Services performed for customers through February 27, 2022, but unbilled and uncollected were $3,120.
2.		Received notice that a customer who was billed $160 for services performed February 10 has filed for bankruptcy. Sage Hill Cleaning Services does not expect to collect any portion of this outstanding receivable.
3.		Sage Hill Cleaning Services uses the allowance method to estimate bad debts. Sage Hill Cleaning Services estimates that 3% of its month-end receivables will not be collected.
4.		Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $410 salvage value.
5.		Record 1 month of insurance expense.
6.		An inventory count shows $330 of supplies on hand at February 28.
7.		One week of services were performed for the customer who paid in advance on February 17.
8.		Accrue for wages owed through February 28, 2022.
9.		Accrue for interest expense for 1 month.
10.		Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to “income before taxes” to help with the income tax calculation.)

**SAGE HILL CLEANING SERVICES INC.**

**Trial Balance as of 2/28/22**

| Account Name | Debit ($) | Credit ($) |
|--------------------------------------------------------|-----------|------------|
| Cash | 8,274 | |
| Accounts Receivable | 4,680 | |
| Supplies | 800 | |
| Prepaid Insurance | 2,018 | |
| Prepaid Expenses | 180 | |
| Equipment | 3,950 | |
| Accounts Payable | | 550 |
| Notes Payable | | 6,560 |
| Unearned Service Revenue | | 432 |
| Common Stock | | 6,150 |
| Paid-in Capital in Excess of Par Value-Common Stock | | 4,510 |
| Cash Dividends | 770 | |
| Treasury Stock | 750 | |
| Service Revenue | | 6,730 |
| Utilities Expense | 180 | |
| Salaries and Wages Expense | 3,120 | |
| Loss on Disposal of Plant Assets | 210 | |
| **Totals** | **24,932**| **24,932** |

**Detailed Explanation:**

1. **Trial Balance Overview:**
- A trial balance is prepared to show that the total debits equal the total credits in the ledger accounts. It is a key step in the accounting cycle.

2. **Debit and Credit Columns:**
- The left column lists accounts with debit balances, while the right column shows accounts with credit balances.

3. **Accounts and Balances:**
- **Assets:** Include Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Expenses, and Equipment.
- **Liabilities:** Include Accounts Payable, Notes Payable, and Unearned Service Revenue.
- **Equity:** Include Common Stock, Paid-in Capital in Excess of Par Value, and Treasury Stock.
- **Expenses and Dividends:** Include Cash Dividends, Utilities Expense, Salaries and Wages Expense, and Loss on Disposal of Plant Assets.
- **Revenues:** Represented by Service Revenue.

4. **Balancing Totals:**

**Ledger Accounts Posting**

Post to the ledger accounts. *(Post entries in the order of journal entries presented above.)*

**Cash:**
- 2/21: Debit 10560, Credit 1740
- 2/22: Credit 240
- 2/23: Credit 200
- 2/25: Credit 3240, Debit 200
- 2/28: Debit 450, Credit 250
- 2/28: Credit 720
- 2/28: Balance 770

**Accounts Receivable:**
- 2/18: Debit 1235, Credit 2115
- 2/23: Debit 3580

**Supplies:**
- 2/25: Debit 800

**Prepaid Insurance:**
- 2/28: Debit 2018

**Prepaid Expenses:**
- 2/27: Debit 180
- 2/28: Credit 180

**Equipment:**
- 2/28: Debit 3460

**Accounts Payable:**
- 2/18: Credit 785, Debit 800

**Notes Payable:**
- 2/23: Credit 6500

**Unearned Service Revenue:**
- 2/27: Credit 432

**Common Stock:**
- 2/21: Credit 6150

**Paid in Capital in Excess of Par:**
- 2/21: Credit 4510

**Cash Dividends:**
- 2/28: Debit 270

**Treasury Stock:**
- 2/23: Debit 320

**Service Revenue:**
- 2/25: Credit 3200

**Utilities Expense:**
- 2/21: Debit 180

**Salaries and Wages Expense:**
- 2/23: Debit 350

**Loss on Disposal of Plant Assets:**
- 2/25: Debit 210

---

Each account is structured with date columns on the left, followed by the transaction type (debit or credit) and corresponding amounts. Balances are updated as per the final postings in the entries.

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