Adjusting Entries Judy Brock began Brock Refinishing Service on July 1. Selected

Question

Adjusting Entries Judy Brock began Brock Refinishing Service on July 1. Selected accounts are shown below as of July 31, before any adjusting entries have been made:

Monthly financial statements are prepared. Using the following information, record in a general journal the adjusting entries necessary on July 31:

a. On July 1, the firm paid one year's rent of $5,700.

b. On July 1, $930 was paid to a local newspaper for an advertisement to run daily for the months of July, August and September.

c. Supplies of $1,100 were on hand July 31.

d. At July 31, refinishing services of $975 have been performed but not yet billed to customers. The firm uses the account Fees Receivable to reflect amounts due but not billed.

e. One customer paid $900 in advance for a refinishing project. At July 31, the project is one-half complete.

Round your answers to the nearest dollar.

Debit Credit Prepaid rent $5,700 Prepaid advertising 930 Supplies 3,000 Unearned refinishing fees 900 Refinishing fees revenue 2,500

Explanation / Answer

Adjusting entry :

Date account and explanation debit credit July 31 Rent expense (5700/12) 475 Prepaid rent 475 (To record rent expense) July 31 Advertising expense (930/3) 310 Prepaid advertising 310 (To record advertising expense) July 31 Supplies expense (3000-1100) 1900 Supplies 1900 (To record supplies adjusted) July 31 account Fees Receivable 975 Refinishing fees revenue 975 (To record accured revenue) July 31 Unearned refinishing fees (900/2) 450 refinishing fees Revenue 450 (To record revenue)

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