The unadjusted trial balance as of December 31, 2024, for the Bags Consulting Company appears below. December 31 is the company’s reporting year-end. Account Title Debits Credits Cash $ 20,800 Accounts receivable 10,000 Prepaid insurance 4,000 Land 255,000 Buildings 80,000 Accumulated depreciation—buildings $ 32,000 Office equipment 117,000 Accumulated depreciation—office equipment 46,800 Accounts payable 31,650 Salaries payable 0 Deferred rent revenue 13,500 Common stock 300,000 Retained earnings 50,550 Service revenue 94,000 Interest revenue 5,800 Rent revenue 0 Salaries expense 41,000 Depreciation expense 0 Insurance expense 0 Utilities expense 25,200 Maintenance expense 21,300 Totals $ 574,300 $ 574,300 Information necessary to prepare the year-end adjusting entries appears below. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight-line depreciation method. The office equipment is depreciated at 10 percent of original cost per year. Prepaid insurance expired during the year, $2,000. Accrued salaries at year-end, $1,700. Rent to customers who paid in advance has been provided for $8,300. Required: From the trial balance and information given, prepare adjusting entries. Post the beginning balances and adjusting entries into the appropriate T-accounts. Prepare an adjusted trial balance. Prepare closing entries. Prepare a post-closing trial balance.

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter21: Accounting For Accruals, Deferrals, And Reversing Entries

Section: Chapter Questions

Problem 1MP

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Question

The unadjusted trial balance as of December 31, 2024, for the Bags Consulting Company appears below. December 31 is the company’s reporting year-end.

Account Title	Debits	Credits
Cash	$ 20,800
Accounts receivable	10,000
Prepaid insurance	4,000
Land	255,000
Buildings	80,000
Accumulated depreciation—buildings		$ 32,000
Office equipment	117,000
Accumulated depreciation—office equipment		46,800
Accounts payable		31,650
Salaries payable		0
Deferred rent revenue		13,500
Common stock		300,000
Retained earnings		50,550
Service revenue		94,000
Interest revenue		5,800
Rent revenue		0
Salaries expense	41,000
Depreciation expense	0
Insurance expense	0
Utilities expense	25,200
Maintenance expense	21,300
Totals	$ 574,300	$ 574,300

Information necessary to prepare the year-end adjusting entries appears below.

The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight-line depreciation method.
The office equipment is depreciated at 10 percent of original cost per year.
Prepaid insurance expired during the year, $2,000.
Accrued salaries at year-end, $1,700.
Rent to customers who paid in advance has been provided for $8,300.

From the trial balance and information given, prepare adjusting entries.
Post the beginning balances and adjusting entries into the appropriate T-accounts.
Prepare an adjusted trial balance.
Prepare closing entries.
Prepare a post-closing trial balance.

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