It is December 31, 2017. Trents\' haven\'t followed your recommendation to hire

Question

It is December 31, 2017. Trents' haven't followed your recommendation to hire a new accounting clerk so they ask you to help them prepare their adjusted Trial Balance at December 31, 2017. They use the accrual method of accounting. They provide you with the unadjusted Trial Balance and information about 8 transactions (next page) Required: [18 marks] Answer this question using accounting paper or an Excel spreadsheet. 1. Prepare the adjusting journal entries required at December 31,2017 based on the information provided. [Note: additional accounts may be needed] [8 marks] 2. Prepare the Adjusted Trial Balance at December 31,2017 [10 marks] Trents' Transportation Corp Unadjusted Trial Balance December 31, 2017 Account Name Debit Credit Cash Accounts Receivable Prepaid Insurance Vehicles (net of depreciation Other Fixed Assets Accounts Payable Salaries Payable Unearned Revenue Common Shares Retained Earnings Transportation Revenue $50,500 10,000 2,500 42,000 30,000 11,500 2,200 5,000 35,000 26,800 112,400 General& Admin Expense Insurance Expense Legal Expense Salaries Expense Supplies Expense Totals 18,000 1,500 5,000 21,400 12,000 $192,900 $192,900

Explanation / Answer

1 Following are the journal entries in the books of Trents' Transportation Corp. Sr No. Particulars Debit Credit $ $ 1 Insurance Expenses A/c Dr          500.00 Prepaid Insurance A/c Cr          500.00 (Being Insurance premium recognised for the period 1st Oct, 2017 to 31st Dec, 2017) 2 Accounts Payable A/c Dr       2,500.00 Legal Expenses A/c Cr       2,500.00 (Being reversal of accrual for legal charges on payment of actual charges) 3 Salaries Expenses A/c Dr       3,600.00 Salaries Payable A/c Cr       3,600.00 (being amount payable to employees) 4 Unearned Revenue A/c Dr       5,000.00 Transportation Revenue A/c Cr       5,000.00 (Being revenue recognised on completion of work) 5 Accounts Receivable A/c Dr       6,200.00 Transportation Revenue A/c Cr       6,200.00 (Being revenue recognised on account of service rendered to Ryerson Ltd) 6 Transportation Revenue A/c Dr       9,500.00 Unearned Revenue A/c Cr       9,500.00 (Being revenue to be recognised on actual performance of service to Machinex Inc.) 7 Bad Debts Expenses A/c Dr       1,500.00 Accounts Receivable A/c Cr       1,500.00 (Being amount provided for provision of bad and doubtful debts based on the estimation for the period quarter) 8 Retained Earnings A/c Dr     14,000.00 Dividend Payable A/c Cr     14,000.00 (Being dividend payable on outstanding shares) 2 Trents' Transportation Corp. Trial Balance As on 31 December, 2017 Account Name Debit Credit Cash     50,500.00 Accounts Receivable     14,700.00 Prepaid Insurance       2,000.00 Vehicles (net of depreciation)     42,000.00 Other Fixed Assets     30,000.00 Accounts Payable       9,000.00 Salaries Payable       5,800.00 Unearned Revenue       9,500.00 Dividend Payable     14,000.00 Common shares     35,000.00 Retained Earnings     12,800.00 Transportation Revenue 114,100.00 General & Admin Expense     18,000.00 Insurance Expense       2,000.00 Legal Expense       2,500.00 Salaries Expense     25,000.00 Bad Debts Expense       1,500.00 Supplies Expense     12,000.00 Total 200,200.00 200,200.00

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