Preparing Accounting Adjustments Pownall Photomake Company, a commercial photography studio, completed its first year of operations on December 31. Account balances before year-end adjustments follow; no adjustments have been made to the accounts at any time during the year. Assume that all balances are normal. Cash $2,150 Accounts Payable $1,910 Accounts Receivable 3,800 Unearned Photography Fees 2,600 Prepaid Rent Prepaid Insurance Supplies 12,600 2,970 4,250 Common Stock 24,000 Photography Fees Earned 34,480 Wages Expense 11,000 Equipment 22,800 Utilities Expense 3,420 An analysis of the firm's records discloses the following (business began on January 1). 1. Photography services of $925 have been rendered, but customers have not yet paid or been billed. The company uses the account Fees Receivable to reflect amounts due but not yet billed. 2. Equipment, purchased January 1, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $400, but the bill will not arrive or be paid until January of next year. (All prior months' utilities bills have been received and paid.) 4. The balance in Prepaid Rent represents the amount paid on January 1, for a 2-year lease on the studio it operates from. Prepare its adjusting entries using the financial statement effects template. Use negative signs with answers, when appropriate. Balance Sheet 5. In November, customers paid $2,600 cash in advance for photos to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31, all of these fees are earned. 6. A 3-year insurance premium paid on January 1, was debited to Prepaid Insurance. 7. Supplies still available at December 31 are $1,520. 8. At December 31, wages expense of $375 has been incurred but not yet paid or recorded. Transaction (1) (2) (3) (4) (5) (6) M (8) Check Cash Asset Noncash Contributed Earned Assets - Liabilities Capital + Capital Revenue Income Statement Expenses Net Income

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Preparing Accounting Adjustments
Pownall Photomake Company, a commercial photography studio, completed its first year of operations on December 31. Account balances before year-end adjustments follow; no adjustments have been made to the accounts at any time during the year. Assume that all balances are normal.
Cash
$2,150
Accounts Payable $1,910
Accounts Receivable 3,800 Unearned Photography Fees 2,600
Prepaid Rent
12,600
Prepaid Insurance 2,970
Common Stock 24,000
Photography Fees Earned 34,480
Supplies
4,250
Wages Expense 11,000
Equipment
22,800
Utilities Expense 3,420
An analysis of the firm's records discloses the following (business began on January 1).
1. Photography services of $925 have been rendered, but customers have not yet paid or been billed. The company uses the account Fees Receivable to reflect amounts due but not yet billed.
2. Equipment, purchased January 1, has an estimated life of 10 years.
3. Utilities expense for December is estimated to be $400, but the bill will not arrive or be paid until January of next year. (All prior months' utilities bills have been received and paid.)
4. The balance in Prepaid Rent represents the amount paid on January 1, for a 2-year lease on the studio it operates from.
5. In November, customers paid $2,600 cash in advance for photos to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31, all of these fees are earned.
6. A 3-year insurance premium paid on January 1, was debited to Prepaid Insurance.
7. Supplies still available at December 31 are $1,520.
8. At December 31, wages expense of $375 has been incurred but not yet paid or recorded.
Prepare its adjusting entries using the financial statement effects template.
Use negative signs with answers, when appropriate.
Balance Sheet
Transaction
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Check
Cash
Asset +
Noncash
Assets
= Liabilities +
Contributed
Earned
Capital + Capital
Revenue
Income Statement
Expenses = Net Income
Transcribed Image Text:Preparing Accounting Adjustments Pownall Photomake Company, a commercial photography studio, completed its first year of operations on December 31. Account balances before year-end adjustments follow; no adjustments have been made to the accounts at any time during the year. Assume that all balances are normal. Cash $2,150 Accounts Payable $1,910 Accounts Receivable 3,800 Unearned Photography Fees 2,600 Prepaid Rent 12,600 Prepaid Insurance 2,970 Common Stock 24,000 Photography Fees Earned 34,480 Supplies 4,250 Wages Expense 11,000 Equipment 22,800 Utilities Expense 3,420 An analysis of the firm's records discloses the following (business began on January 1). 1. Photography services of $925 have been rendered, but customers have not yet paid or been billed. The company uses the account Fees Receivable to reflect amounts due but not yet billed. 2. Equipment, purchased January 1, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $400, but the bill will not arrive or be paid until January of next year. (All prior months' utilities bills have been received and paid.) 4. The balance in Prepaid Rent represents the amount paid on January 1, for a 2-year lease on the studio it operates from. 5. In November, customers paid $2,600 cash in advance for photos to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31, all of these fees are earned. 6. A 3-year insurance premium paid on January 1, was debited to Prepaid Insurance. 7. Supplies still available at December 31 are $1,520. 8. At December 31, wages expense of $375 has been incurred but not yet paid or recorded. Prepare its adjusting entries using the financial statement effects template. Use negative signs with answers, when appropriate. Balance Sheet Transaction (1) (2) (3) (4) (5) (6) (7) (8) Check Cash Asset + Noncash Assets = Liabilities + Contributed Earned Capital + Capital Revenue Income Statement Expenses = Net Income
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Completing the Accounting Cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education