Chapter 3, Problem 3PA

Adjusting entries

Trident Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:

For preparing the adjusting entries, the following data were assembled:

• Fees earned but unbilled on November 30 were $7,000.

• Supplies on hand on November 30 were $1,300.

• Depreciation of equipment was estimated to be $7,200 for the year.

• The balance in unearned fees represented the November 1 receipt in advance for services to be provided. During November, $13,500 of the services were provided.

• Unpaid wages accrued on November 30 were $4,800.

Instructions

1. Journalize the adjusting entries necessary on November 30, 20Y3.

2. Determine the revenues, expenses, and net income of Trident Repairs & Service before the adjusting entries.

3. Determine the revenues, expense, and net income of Trident Repairs & Service after the adjusting entries.

4. Determine the effect of the adjusting entries on Retained Earnings.