Adjusting Entries Milbank Repairs & Service, an electronics repair store, prepar
ID: 2611437 • Letter: A
Question
Adjusting Entries
Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:
For preparing the adjusting entries, the following data were assembled:
Required:
Fees earned but unbilled on June 30 were $9,340.
Supplies on hand on June 30 were $7,620.
Depreciation of equipment was estimated to be $12,900 for the year.
The balance in unearned fees represented the June 1 receipt in advance for services to be provided. During June $17,930 of the services was provided.
Unpaid wages accrued on June 30 were $1,650.
1. Journalize the adjusting entries necessary on June 30, 2019.
2. Determine the revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries.
3. Determine the revenues, expenses, and net income of Milbank Repairs & Service after the adjusting entries.
4. Determine the effect of the adjusting entries on Nancy Townes, Capital.
Nancy Townes, Capital by $.
Balances Credit
Balances Cash 12,900 Accounts Receivable 85,660 Supplies 20,640 Equipment 490,700 Accounts Payable 20,120 Unearned Fees 22,700 Nancy Townes, Capital 355,000 Nancy Townes, Drawing 17,030 Fees Earned 516,000 Wages Expense 119,710 Rent Expense 91,330 Utilities Expense 65,530 Miscellaneous Expense 10,320 913,820 913,820
Explanation / Answer
Uadjusted Trial Balance June 30th 2019 Heads Debit Credit Cash $ 12,900.00 Accounts Receivable $ 85,660.00 Supplies $ 20,640.00 Equipment $ 490,700.00 Accounts Payable $ 20,120.00 Unearned Fees $ 22,700.00 Nancy's Townes Capital $ 355,000.00 Nancy's Townes Drawings $ 17,030.00 Fees Earned $ 516,000.00 Wages Expenses $ 119,710.00 Rent Expenses $ 91,330.00 Utilities Expenses $ 65,530.00 Miscellaneous Expenses $ 10,320.00 Total $ 913,820.00 $ 913,820.00 1) Adjusted Journal Entries Date Particular Amount (Dr) Amount 30th June Accounts Receivable $ 9,340.00 To Fees Earned $ 9,340.00 (Being amount of fees earned but unbilled) 30th June Supplies Expenses=($20640-$7620) $ 13,020.00 To Office Supplies $ 13,020.00 (Being amount of office supplies expenses 30th June Depreciation $ 12,900.00 To Accumulated Depreciation $ 12,900.00 (Being amount of depreciation) 30th June Unearned Fees $ 17,930.00 To Fees Earned $ 17,930.00 (Being amount of Service performed against advance received earlier) 30th june Wages $ 1,650.00 To Wages Payable $ 1,650.00 (Being amount of Wages payable) 2) Revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries. Revenue: Fees Earned $ 516,000.00 Expenses: Wages Expenses $ 119,710.00 Rent Expenses $ 91,330.00 Utilties Expenses $ 65,530.00 Miscellaneous Expenses $ 10,320.00 $ 286,890.00 Net Income($516000-$286890) $ 229,110.00 3) Revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries. Revenue: Fees Earned=($516000+$9340+$17930) $ 543,270.00 Expenses: Wages Expenses=($119710+$1650) $ 121,360.00 Rent Expenses $ 91,330.00 Supplies Expenses $ 13,020.00 Utilties Expenses $ 65,530.00 Depreciation Expenses $ 12,900.00 Miscellaneous Expenses $ 10,320.00 $ 314,460.00 Net Income($543270-$314460) $ 228,810.00 4) Before Adjustments Nancy Townes Capital $ 355,000.00 Less: Drawings $ 17,030.00 Add: Net Income $ 229,110.00 Nancy Townes Capital $ 567,080.00 After Adjustments Nancy Townes Capital $ 355,000.00 Less: Drawings $ 17,030.00 Add: Net Income $ 228,810.00 Nancy Townes Capital $ 566,780.00 Nancy's capital after adjustment is reduced by due to decrease in net income=($567080-$566780) $ 300.00
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