515 ) 16 Date Prof. Barnes David operates a mechanic shop and below is his busin

Question

515 ) 16 Date Prof. Barnes David operates a mechanic shop and below is his business Trial Balance for the month of January 2018. David's Mechanic Shop Inc. Trial Balance January 31, 2018 Dr Cash Accounts Receivable Supplies Prepaid Insurance Expense Equipment Notes Payable Owner's Equity Owner's Drawings Unearned Revenue Accounts Payable Salary Payable Service Revenue Rent Expense Utility Expense $ 16,950 25,500 55,000 24,000 150,000 $50,000 25,000 10,000 35,000 15,000 6,000 156,000 2,550 3,000 287,000 S 287,000 After reviewing the Trial Balance David ralized he needs to prepare the following month-end adjustments. A. Please prepare the adjusting journal entries for 01/31/2018. A supply count was performed, and it was determined the ending Supplies balance for the month should have been $40,000. 1. Debt. Cred Date Doscn pihon 32.0t 2. The unearned revenue balance for the month should have been $5,000. 3. The Prepaid Insurance Expense balance for January 2018 should have been $20,000.

Explanation / Answer

Prepare adjusting entries:

Adjusting entries are the entries done to make correct account balances.

Prepare an adjusted trial balance:

Adjusted trial balance is prepared after adjusting entries.

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