Required: 1. From the trial balance and information given, prepare adjusting entries. a. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight- line depreciation method. b. The office equipment is depreciated at 10 percent of original cost per year. c. Prepaid insurance expired during the year, $1,000. d. Accrued salaries at year-end, $1,500. e. Rent to customers who paid in advance has been provided for $6,300. 2. Post the beginning balances and adjusting entries into the appropriate T-accounts. 3. Prepare an adjusted trial balance. 4. Prepare closing entries. 5. Prepare a post-closing trial balance. 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 Cash Accounts receivable Prepaid insurance Land Buildings Accumulated depreciation-buildings Office equipment Accumulated depreciation-office equipment Accounts payable Salaries payable Deferred rent revenue Common stock Retained earnings Service revenue Interest revenue Debits Credits $ 8,000 9,000 3,000 200,000 50,000 $ 20,000 100,000 40,000 35,050 0 7,500 200,000 56,450 90,000 3,000 0 Rent revenue Salaries expense 37,000 Depreciation expense 0 Insurance expense 0 Utilities expense 30,000 Maintenance expense 15,000 Totals $452,000 $452,000
Required: 1. From the trial balance and information given, prepare adjusting entries. a. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight- line depreciation method. b. The office equipment is depreciated at 10 percent of original cost per year. c. Prepaid insurance expired during the year, $1,000. d. Accrued salaries at year-end, $1,500. e. Rent to customers who paid in advance has been provided for $6,300. 2. Post the beginning balances and adjusting entries into the appropriate T-accounts. 3. Prepare an adjusted trial balance. 4. Prepare closing entries. 5. Prepare a post-closing trial balance. 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 Cash Accounts receivable Prepaid insurance Land Buildings Accumulated depreciation-buildings Office equipment Accumulated depreciation-office equipment Accounts payable Salaries payable Deferred rent revenue Common stock Retained earnings Service revenue Interest revenue Debits Credits $ 8,000 9,000 3,000 200,000 50,000 $ 20,000 100,000 40,000 35,050 0 7,500 200,000 56,450 90,000 3,000 0 Rent revenue Salaries expense 37,000 Depreciation expense 0 Insurance expense 0 Utilities expense 30,000 Maintenance expense 15,000 Totals $452,000 $452,000
Chapter4: The Adjustment Process
Section: Chapter Questions
Problem 13PB: Prepare adjusting journal entries, as needed, considering the account balances excerpted from the...
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Transcribed Image Text:Required:
1. From the trial balance and information given, prepare adjusting entries.
a. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight-
line depreciation method.
b. The office equipment is depreciated at 10 percent of original cost per year.
c. Prepaid insurance expired during the year, $1,000.
d. Accrued salaries at year-end, $1,500.
e. Rent to customers who paid in advance has been provided for $6,300.
2. Post the beginning balances and adjusting entries into the appropriate T-accounts.
3. Prepare an adjusted trial balance.
4. Prepare closing entries.
5. Prepare a post-closing trial balance.
Transcribed Image Text: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
Cash
Accounts receivable
Prepaid insurance
Land
Buildings
Accumulated depreciation-buildings
Office equipment
Accumulated depreciation-office equipment
Accounts payable
Salaries payable
Deferred rent revenue
Common stock
Retained earnings
Service revenue
Interest revenue
Debits
Credits
$ 8,000
9,000
3,000
200,000
50,000
$ 20,000
100,000
40,000
35,050
0
7,500
200,000
56,450
90,000
3,000
0
Rent revenue
Salaries expense
37,000
Depreciation expense
0
Insurance expense
0
Utilities expense
30,000
Maintenance expense
15,000
Totals
$452,000
$452,000
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