COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
4th Edition
ISBN: 9781260255157
Author: Haddock
Publisher: MCG CUSTOM
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Chapter 5, Problem 2PB

1.

To determine

Record adjusted trial balance in the adjusted trial balance column of the worsheet.

1.

Expert Solution
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Explanation of Solution

Trial Balance:

Trial balance is the summary of all the accounts affected in a financial year. Financial statements are prepared with the help of trial balance.

The adjusted trial balance column of the worksheet of KN:

Account Title

Unadjusted

Trial balance

Adjustments

Adjusted

Trial balance

 Dr. ($)Cr. ($)Dr. ($)Cr. ($)Dr. ($)Cr. ($)
Cash    70,100 
Accounts receivable    17,000 
Supplies    13,600 
Prepaid rent    81,600 
Equipment    132,000 
Accumulated depreciation-equipment     1,100
Accounts payable     34,000
KN, capital     160,000
KN, drawing    12,000 
Fees income     171,400
Depreciation expense–equipment    1,100 
Rent expense    6,800 
Salaries expense    21,600 
Supplies expense    7,200 
Utilities expense    3,500 
Total    366,500366,500

Table (1)

2.

To determine

Prepare adjustments entries in the adjustment column of the worksheet

2.

Expert Solution
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Explanation of Solution

The adjustment column of the worksheet of KN:

Account Title

Unadjusted

Trial balance

Adjustments

Adjusted

Trial balance

 Dr. ($)Cr. ($)Dr. ($)Cr. ($)Dr. ($)Cr. ($)
Cash    70,100 
Accounts receivable    17,000 
Supplies   7,20013,600 
Prepaid rent   6,80081,600 
Equipment    132,000 
Accumulated depreciation-equipment   1,100 1,100
Accounts payable     34,000
KN, capital     160,000
KN, drawing    12,000 
Fees income     171,400
Depreciation expense–equipment  1,100 1,100 
Rent expense  6,800 6,800 
Salaries expense    21,600 
Supplies expense  7,200 7,200 
Utilities expense    3,500 
Total  15,10015,100366,500366,500

Table (2)

3.

To determine

Complete the trial balance columns of the worksheet and find the contra asset account on the adjusted trial balance.

3.

Expert Solution
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Explanation of Solution

The complete trial balance columns of the worksheet of KN:

Account Title

Unadjusted

Trial balance

Adjustments

Adjusted

Trial balance

 Dr. ($)Cr. ($)Dr. ($)Cr. ($)Dr. ($)Cr. ($)
Cash70,100   70,100 
Accounts receivable17,000   17,000 
Supplies20,800  7,20013,600 
Prepaid rent88,400  6,80081,600 
Equipment132,000   132,000 
Accumulated depreciation-equipment   1,100 1,100
Accounts payable 34,000   34,000
KN, capital 160,000   160,000
KN, drawing12,000   12,000 
Fees income 171,400   171,400
Depreciation expense–equipment  1,100 1,100 
Rent expense  6,800 6,800 
Salaries expense21,600   21,600 
Supplies expense  7,200 7,200 
Utilities expense3,500   3,500 
Totals365,400365,40015,10015,100366,500366,500

Table (3)

Accumulated depreciation-equipment is the contra account on the adjusted trial balance.

Working Note: Calculate balance of prepaid rent prior to the adjusting entry of expired rent:

Unadjustedprepaidinsurancebalance=Adjustedbalance+Expiredrent=$21,000+$3,500=$24,500

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