Please assist with the following: Preparing an Unadjusted Trial Balance and Adju
ID: 2343113 • Letter: P
Question
Please assist with the following:
Preparing an Unadjusted Trial Balance and Adjustments SnapShot Company, a commercial photography studio, has just completed its first full year of operations on December 31, 2015. General ledger account balances before year-end adjustments follow; no adjusting entries have been made to the accounts at any time during the year. Assume that all balances are normal. Cash $2,150 Accounts Payable $1,910 Accounts Receivable 3,800 Unearned Photography Fees 2,600 12,600 Common Stock Prepaid Insurance 2,970 Photography Fees Earned 34,480 4,250 Wages Expense 22,800 Utilities Expense Prepaid Rent 24,000 Supplies 11,000 Equipment 3,420 An analysis of the firm's records discloses the following.Explanation / Answer
SnapShot Company
Unadjusted trial balance:
Adjusting entries:
SnapShot Company
Unadjusted Trial Balance
as on December 31, 2015
Account Titles
Debit
Credit
Cash
$2,150
Accounts Receivable
$4,725
Prepaid Rent
$6,300
Prepaid Insurance
$1,980
Supplies
$1,520
Equipment
$22,800
Accumulated Depreciation
$2,280
Accounts Payable
$1,910
Wages Payable
$375
Utilities Payable
$400
Common Stock
$24,000
Photography Fees Earned
$38,005
Wages Expense
$11,375
Utilities Expense
$3,820
Rent Expense
$6,300
Depreciation Expense
$2,280
Insurance Expense
$990
Supplies Expense
$2,730
Total
$66,970
$66,970
Beg. Bal = $3,800
Add: unbilled services = $925
Ending bal = $4,725
Beg bal = 12,600
Less; rent expense = $6,300
Ending bal = $6,300
Beg. Bal = $2,970
Insurance expense = $990
Ending balance = $1,980
Beg. Bal = $34,480
Add: unbilled = $925
Add: unearned portion earned = $2,600
Ending balance = $38,005
Adjusting entries using the financial statement effects template
BALANCE SHEET
INCOME STATEMENT
Transaction
Cash Assets
+
Non-Cash Assets
-
Contra Assets
=
Liabilities
+
Contributed Capital
+
Earned Capital
Revenue
-
Expenses
=
Net Income
1
Fees earned but not received
0
$925
0
0
$925
$925
0
$925
2
Depreciation expense for one year
0
0
$2,280
0
0
($2,280)
0
$2,280
($2,280)
3
Utilities expense
0
0
0
$400
0
($400)
0
$400
($400)
4
rent expense
0
($6,300)
0
0
0
($6,300)
0
$6,300
($6,300)
5
photo revenues
0
0
0
($2,600)
0
$2,600
$2,600
$0
$2,600
6
insurance expense
0
($990)
0
0
0
($990)
0
$990
($990)
7
Supplies expense
0
($2,730)
0
$0
0
($2,730)
0
$2,730
($2,730)
8
Wages expense
0
$0
0
$375
0
($375)
0
$375
($375)
Totals
0
($9,095)
($2,280)
($1,825)
0
($9,550)
$3,525
$13,075
($9,550)
Adjusting entries:
Adjusting entries:
Date
Account Titles and Explanation
Ref. No.
Debit
Credit
31-Dec-15
Fees Receivable
$925
Photography Fee Earned
$925
(To record revenue earned but not billed)
31-Dec-15
Depreciation Expense
$2,280
Accumulated depreciation
$2,280
(To record depreciation expense, $22,800/10 years = $2,280)
31-Dec-15
Utiliities Expense
$400
Utilities Payable
$400
(To record December utilities unpaid)
31-Dec-15
Rent Expense
$6,300
Prepaid Rent
$6,300
(To record expired portion of prepaid rent, $12,600/2 years = $6,300)
31-Dec-15
Unearned Photography Fee
$2,600
Photography Fee Earned
$2,600
(To record recognition of fee advances)
31-Dec-15
Insurance Expense
$990
Prepaid Insurance
$990
(To record expired portion of prepaid insurance, $2,970/3 years = $990)
31-Dec-15
Supplies Expense
$2,730
Supplies
$2,730
(To record cost of supplies used, $4,250 - $1,520 = $2,730)
31-Dec-15
Wages Expense
$375
Wages Payable
$375
(To record unpaid wages)
SnapShot Company
Unadjusted Trial Balance
as on December 31, 2015
Account Titles
Debit
Credit
Cash
$2,150
Accounts Receivable
$4,725
Prepaid Rent
$6,300
Prepaid Insurance
$1,980
Supplies
$1,520
Equipment
$22,800
Accumulated Depreciation
$2,280
Accounts Payable
$1,910
Wages Payable
$375
Utilities Payable
$400
Common Stock
$24,000
Photography Fees Earned
$38,005
Wages Expense
$11,375
Utilities Expense
$3,820
Rent Expense
$6,300
Depreciation Expense
$2,280
Insurance Expense
$990
Supplies Expense
$2,730
Total
$66,970
$66,970