Concept explainers
1.
Record adjusted
1.
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 | |||||
17,000 | ||||||
Supplies | 13,600 | |||||
Prepaid rent | 81,600 | |||||
Equipment | 132,000 | |||||
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 | 366,500 | 366,500 |
Table (1)
2.
Prepare adjustments entries in the adjustment column of the worksheet
2.
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 | 7,200 | 13,600 | ||||
Prepaid rent | 6,800 | 81,600 | ||||
Equipment | 132,000 | |||||
Accumulated | 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 | 15,100 | 15,100 | 366,500 | 366,500 |
Table (2)
3.
Complete the trial balance columns of the worksheet and find the contra asset account on the adjusted trial balance.
3.
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. ($) | Cr. ($) | |
Cash | 70,100 | 70,100 | ||||
Accounts receivable | 17,000 | 17,000 | ||||
Supplies | 20,800 | 7,200 | 13,600 | |||
Prepaid rent | 88,400 | 6,800 | 81,600 | |||
Equipment | 132,000 | 132,000 | ||||
Accumulated depreciation-equipment | 1,100 | 1,100 | ||||
Accounts payable | 34,000 | 34,000 | ||||
KN, capital | 160,000 | 160,000 | ||||
KN, drawing | 12,000 | 12,000 | ||||
Fees income | 171,400 | 171,400 | ||||
Depreciation expense–equipment | 1,100 | 1,100 | ||||
Rent expense | 6,800 | 6,800 | ||||
Salaries expense | 21,600 | 21,600 | ||||
Supplies expense | 7,200 | 7,200 | ||||
Utilities expense | 3,500 | 3,500 | ||||
Totals | 365,400 | 365,400 | 15,100 | 15,100 | 366,500 | 366,500 |
Table (3)
Accumulated depreciation-equipment is the contra account on the adjusted trial balance.
Working Note: Calculate balance of prepaid rent prior to the
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