Final
| QUESTION 1 40% points | |||||||||||||
| Jake’s consulting Inc. does consulting business and provides auxiliary services for businesses. Their unadjusted Trial Balance (TB) | |||||||||||||
| and adjusted Trial Balance worksheets at 31-DEC-2012 are provided below. | |||||||||||||
| 31-Dec-12 | UNADJUSTED TB | ADJUSTMENTS | ADJUSED TB | CLOSING ENTRIES | |||||||||
| DR | CR | DR | CR | DR | CR | DR | CR | ||||||
| Cash | 42,000 | ||||||||||||
| Accounts Receivable | 18,000 | ||||||||||||
| Supplies | 7,000 | ||||||||||||
| Prepaid Insurance | 12,000 | ||||||||||||
| Furniture | 8,000 | ||||||||||||
| Accumulated depreciation, furniture | 3,200 | ||||||||||||
| Buildings | 75,000 | ||||||||||||
| Accumulated depreciation, buildings | 6,000 | ||||||||||||
| Accounts Payable | 13,000 | ||||||||||||
| Salaries and wages payable | – | Retained Earnings | |||||||||||
| Unearned Consulting Revenue | 2,500 | Dividends | |||||||||||
| Dividends | 10,500 | Consulting Revenues | |||||||||||
| Common Shares | 2,000 | Auxiliary Revenues | |||||||||||
| Retained Earnings | 26,000 | Retained Earnings | |||||||||||
| Consulting Revenue | 183,000 | Retained Earnings | |||||||||||
| Auxiliary Revenue | 2,000 | Depreciation – Furn | |||||||||||
| Depreciation Expense, Furniture | – | Depreciation – Bldg | |||||||||||
| Depreciation Expense, Buildings | – | Salaries | |||||||||||
| Salaries Expense | 25,000 | Insurance | |||||||||||
| Insurance Expense | 6,000 | Rent | |||||||||||
| Rent Expense | 12,000 | Supplies | |||||||||||
| Supplies Expense | 14,000 | Advertising | |||||||||||
| Advertising Expense | 7,000 | Telephone | |||||||||||
| Telephone Expense | 1,200 | ||||||||||||
| 237,700 | 237,700 | – | – | – | – | – | – | ||||||
| 1. The company paid $12,000 for a 12 month insurance policy on March 31, 2012. | |||||||||||||
| At that time, it was correctly recorded as prepaid insurance. | |||||||||||||
| 2. A supply count reveals $3,000 of supplies are remaining at year-end. | |||||||||||||
| 3. The furniture was purchased several yers ago for $8,000. At that time it was estimted | |||||||||||||
| that the furniture would be useful for 5 years. Adjustment for a full year of depreciation is necessary | |||||||||||||
| 4. The buildings were purchased several years ago for $75,000. At that time it was estimated that the | |||||||||||||
| buildings would be useful for 25 years. An adjustment for a full year of depreciation is required. | |||||||||||||
| 5. Four employees were due to be paid two days of salaries. These employees each typically | |||||||||||||
| receive $300 per day. | |||||||||||||
| 6. On October 1, 2012, the company signed a 4-month contract to provide auxiliary services | |||||||||||||
| to a small business. The contract called for the company to receive $10,000 at the | |||||||||||||
| end of the contract on January 31, 2013. | |||||||||||||
| 7. On September 1, 2012, the company signed a 5 month consulting contract with a client. | |||||||||||||
| The client paid $2,500 in advance for the 5 months of service and that amount was | |||||||||||||
| correctly recorded as unearned consulting revenue at that time. | |||||||||||||
| REQUIRED: | a. Calculate the adjusting entries and adjusted TB. | ||||||||||||
| b. Calculate the closing entries | |||||||||||||
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