Reliable Repairs & Service, an electronics repair store, prepared the following
ID: 2412629 • Letter: R
Question
Reliable Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:
Reliable Repairs & Service
UNADJUSTED TRIAL BALANCE
April 30, 2016
1
Cash
10,350.00
2
Accounts Receivable
67,500.00
3
Supplies
16,200.00
4
Equipment
116,100.00
5
Accounts Payable
15,750.00
6
Unearned Fees
18,000.00
7
Karin Bickle, Capital
121,500.00
8
Karin Bickle, Drawing
13,500.00
9
Fees Earned
294,750.00
10
Wages Expense
94,500.00
11
Rent Expense
72,000.00
12
Utilities Expense
51,750.00
13
Miscellaneous Expense
8,100.00
14
Totals
450,000.00
450,000.00
For preparing the adjusting entries, the following data were assembled:
Chart of Accounts
Journal
1. Journalize the adjusting entries necessary on April 30, 2016. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
Final Questions
2. Determine the revenues, expenses, and net income of Reliable Service & Repairs before the adjusting entries.
Before Adjusting Entries
1
Revenues
2
Expenses
3
Net income
3. Determine the revenues, expenses, and net income of Reliable Service & Repairs after the adjusting entries.
After Adjusting Entries
1
Revenues
2
Expenses
3
Net income
4. Determine the effect of the adjusting entries on Karin Bickle, Capital.
The capital account by
ACCOUNT TITLE DEBIT CREDIT1
Cash
10,350.00
2
Accounts Receivable
67,500.00
3
Supplies
16,200.00
4
Equipment
116,100.00
5
Accounts Payable
15,750.00
6
Unearned Fees
18,000.00
7
Karin Bickle, Capital
121,500.00
8
Karin Bickle, Drawing
13,500.00
9
Fees Earned
294,750.00
10
Wages Expense
94,500.00
11
Rent Expense
72,000.00
12
Utilities Expense
51,750.00
13
Miscellaneous Expense
8,100.00
14
Totals
450,000.00
450,000.00
Explanation / Answer
1. Journal entry Date Account Tittle & Explanation Post ref Debit Credit 30.04.2016 Accounts Receivable………..Dr $9,850 To Fees Earned $9,850 (Being fees earned but not billed) 30.04.2016 Supplies Expense…………Dr $11,540 To Supplies($16200-4660) $11,540 (Being excess treated as expense) 30.04.2016 Depreciation Expense-Equipment …………Dr $6,470 To Accumulated Depreciation-Equipment $6,470 (Being deprecation transferred to Acc dep) 30.04.2016 Unearned Fees ………….Dr $15,000 To Feed Earned $15,000 (Being rent recived) 30.04.2016 Salaries and wages expense………..Dr $5,200 To Salaries and wages payable $5,200 (Being expenses accrued and payable) 2. Computation of Revenue Expense , Expense Net Income before adjusting Entries Revenue Fees Earned $294,750 Less: Expense Wages Expense $94,500 Rebt Expense $72,000 Utilities Expense $51,750 Misc. Expemnse $8,100 $226,350 Net Income $68,400 Computation of Revenue Expense , Net Income after adjusting Entries Revenue Fees Earned ($294750+$15000+9850) $319,600 Less: Expense Depreciation on Equipment $6,470 Wages Expense($94500+5200) $99,700 Rent Expense $72,000 Utilities Expense $51,750 Supplies Expense $11,540 Misc. Expemnse $8,100 $249,560 Net Income $70,040 4. Retained Earning increased by $1640(700400-68400) by effect of adjusting Entries