P3-5A Galloway Company is a small editorial
services company owned and operated by Fran Briggs. On July 31, 2012
Problem 3-5A Adjusting Entries and Adjusted Trial
Balances
P3-5A Galloway Company is a small editorial
services company owned and operated by Fran Briggs. On July 31, 2012, the end
of the current year, Galloway Company's accounting clerk prepared the
unadjusted trial balance shown below.
Galloway Company
Unadjusted Trial
Balance
July 31, 2012
Debit Credit
Cash 7,500 Accounts
Receivable 38,400 Prepaid Insurance
7,200 Supplies 1,980 Land 112,500 Building
200,250 Accumulated
Depreciation-Building 137,550 Equipment 135,300 Accumulated Depreciation-Equipment 97,950 Accounts
Payable 12,150 Unearned Rent 6,750 Salaries and Wages Payable – Fran Briggs,
Capital 221,000 Fran Briggs, Drawing 15,000 Fees Earned 324,600 Rent Revenue - Salaries
and Wages Expense 193,370 Utilities
Expense 42,375 Advertising Expense
22,800 Repairs Expense 17,250
Depreciation
Expense-Building - Depreciation
Expense-Equipment - Insurance Expense - Supplies Expense - Miscellaneous
Expense 6,075 $800,000 $800,000
The data needed to
determine year-end adjustments are as follows:
a. Unexpired
insurance at July 31, $4,800.
b. Supplies on hand
at July 31, $600. c. Depreciation of building for the year, $3,100.
d. Depreciation of equipment for the year, $2,700.
e. Rent unearned at July 31, $1,750.
f. Accrued salaries and wages at July 31, $3,000.
g. Fees earned but unbilled on July 31, $10,750.
Required:
1. Journalize the
adjusting entries using the following additional accounts: Salaries and Wages
Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building;
Depreciation Expense—Equipment; and Supplies Expense.
2. Determine the
balances of the accounts affected by the adjusting entries, and prepare an
adjusted trial balance.
SOLUTION PREVIEW
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Before
starting this problem, click on the worksheet tabs below for
Problem
3-5B, which has been completed as a "Demo or Practice" Problem.
Then
complete Problem 3-5A. Good luck!
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Name______________________________________________
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Problem
3-5A, page 140-141.
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a. Journalize the adjusting entries.
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b. Hint:
Fees earned will be used twice.
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c. Post the Adjusting Entries to the
T-Accounts and prepare a Trial Balance after computing the new account
balances.
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d. After posting from the General Journal to your
T-accounts, be sure to enter the
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General Journal
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Date
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Account Title
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PR
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Debit
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Credit
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a.
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Insurance
Expense
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54
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$
2,400
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Prepaid Insurance
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13
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$
2,400
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Insurance
used up or expired
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b.
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Supplies
expense
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58
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$
1,380
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Supplies
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14
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$
1,380
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Supplies
used
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c.
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Depreciation
- Building
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57
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$
3,100
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