Terrific Temps fills temporary employment positions for local businesses. Some b

Question

Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in
advance for services; others are billed after services have been performed. Advanced payments are
credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis.
An unadjusted trial balance dated December 31, 2015, follows. (Bear in mind that adjusting entries
have already been made for the first 11 months of 2015, but not for December.)

   

  

All equipment was purchased when the business first formed. The estimated life of the equipment at that time was 10 years (or 120 months).

On August 1, 2015, the company borrowed $12,000 by signing a six-month, 8 percent note payable. The entire note, plus six months' accrued interest, is due on February 1, 2016.

  

Journal Entry Worksheet

Record the accrued but uncollected fees earned.

Record fees earned as of December 31st.

Record the December insurance expense.

Record the December rent expense.

Record the offices supplies used in December.

Record the December depreciation expense.

Record the interest accrued in December.

Record the salaries accrued in December.

Record the income taxes accrued in December.

*Enter debits before credits

TERRIFIC TEMPS
UNADJUSTED TRIAL BALANCE
DECEMBER 31, 2015   Cash $ 27,020   Accounts receivable 59,200   Unexpired insurance 900   Prepaid rent 3,000   Office supplies 600   Equipment 60,000   Accumulated depreciation: equipment $ 29,500   Accounts payable 4,180   Notes payable 12,000   Interest payable 320   Unearned fees 6,000   Income taxes payable 4,000   Unearned revenue 20,000   Retained earnings 49,000   Capital stock 25,000   Dividends 3,000   Fees earned 75,000   Travel expense 5,000   Insurance expense 2,980   Rent expense 9,900   Office supplies expense 780   Utilities expense 4,800   Depreciation expense: equipment 5,500   Salaries expense 30,000   Interest expense 320   Income taxes expense 12,000 $ 225,000 $ 225,000

Explanation / Answer

Journal Debit Credit Accrued revenue      1,500 Fees earned      1,500             -   Unearned revenue      2,500             -   Fees earned      2,500             -   prepaid insurance      1,800             -   cash      1,800             -   Prepaid rent 2,700             -   cash      2,700 9900/11*3             -   Supplies expenses          200             -   Office Supplies          200 (600-400)             -   Depreciation expense: equipment 500 Accumulated depreciation: equipment          500 (60000/120)             -   Interest expense 400             -   Interest payable          400 (12000*5/12*8%)             -               -   Salaries expense      2,700             -   Salaries payable      2,700             -   income taxes expense    15,000             -     Income taxes payable    15,000             -   Yes dividend is paid as there is no dividend payable account

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