Required: 1. From the trial balance and information given, prepare adjusting entries. a. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight- line depreciation method. b. The office equipment is depreciated at 10 percent of original cost per year. c. Prepaid insurance expired during the year, $1,000. d. Accrued salaries at year-end, $1,500. e. Rent to customers who paid in advance has been provided for $6,300. 2. Post the beginning balances and adjusting entries into the appropriate T-accounts. 3. Prepare an adjusted trial balance. 4. Prepare closing entries. 5. Prepare a post-closing trial balance. The unadjusted trial balance as of December 31, 2024, for the Bags Consulting Company appears below. December 31 is the company's reporting year-end. Account Title Cash Accounts receivable Prepaid insurance Land Buildings Accumulated depreciation-buildings Office equipment Accumulated depreciation-office equipment Accounts payable Salaries payable Deferred rent revenue Common stock Retained earnings Service revenue Interest revenue Debits Credits $ 8,000 9,000 3,000 200,000 50,000 $ 20,000 100,000 40,000 35,050 0 7,500 200,000 56,450 90,000 3,000 0 Rent revenue Salaries expense 37,000 Depreciation expense 0 Insurance expense 0 Utilities expense 30,000 Maintenance expense 15,000 Totals $452,000 $452,000
Required: 1. From the trial balance and information given, prepare adjusting entries. a. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight- line depreciation method. b. The office equipment is depreciated at 10 percent of original cost per year. c. Prepaid insurance expired during the year, $1,000. d. Accrued salaries at year-end, $1,500. e. Rent to customers who paid in advance has been provided for $6,300. 2. Post the beginning balances and adjusting entries into the appropriate T-accounts. 3. Prepare an adjusted trial balance. 4. Prepare closing entries. 5. Prepare a post-closing trial balance. The unadjusted trial balance as of December 31, 2024, for the Bags Consulting Company appears below. December 31 is the company's reporting year-end. Account Title Cash Accounts receivable Prepaid insurance Land Buildings Accumulated depreciation-buildings Office equipment Accumulated depreciation-office equipment Accounts payable Salaries payable Deferred rent revenue Common stock Retained earnings Service revenue Interest revenue Debits Credits $ 8,000 9,000 3,000 200,000 50,000 $ 20,000 100,000 40,000 35,050 0 7,500 200,000 56,450 90,000 3,000 0 Rent revenue Salaries expense 37,000 Depreciation expense 0 Insurance expense 0 Utilities expense 30,000 Maintenance expense 15,000 Totals $452,000 $452,000
Chapter4: The Adjustment Process
Section: Chapter Questions
Problem 11EA: Prepare adjusting journal entries, as needed, considering the account balances excerpted from the...
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