Preparing Adjusting Entries, Financial Statements, and Closing Entries ACME Tras
ID: 2489345 • Letter: P
Question
Preparing Adjusting Entries, Financial Statements, and Closing Entries ACME Trash Removal ended its 1st month of operations on June 30, 2015. Monthly fnancial statements will be prepared. The unadjusted account balances are as follows. ACME Trash Removal Unadjusted Trial Balance June 30, 2015 Debit Credit Cash ........................................................ $ 1,180 Accounts receivable............................................ 450 Prepaid rent .................................................. 3,100 Supplies ..................................................... 2,520 Equipment ................................................... 4,440 Accounts payable.............................................. $ 760 Common stock................................................ 2,000 Retained earnings ............................................. 5,300 Service fees earned ............................................ 4,650 Wages expense ............................................... 1,020 $12,710 $12,710 The following information is available. 1. The balance in Prepaid Rent was the amount paid on June 1 for the 1st four months’ rent. 2. Supplies available at June 30 were $820. 3. Equipment, purchased June 1, has an estimated life of five years. 4. Unpaid and unrecorded employee wages at June 30 were $210. 5. Utility services used during June were estimated at $300. A bill is expected early in July. 6. Fees earned for services performed but not yet billed on June 30 were $380. The company uses the account Accounts Receivable to reflect amounts due but not yet billed. REQUIRED: Prepare its adjusting entries at June 30, 2015 using the financial statement effects template. Prepare its income statement for June and its balance sheet at June 30, 2015
Explanation / Answer
Description Debit Credit 1 Rent expense 775 Prepaid rent 775 2 Supplies expense 1700 supplies 1700 3 Depreciation 74 Equipment 74 4 Wages 210 Wages outstanding 210 5 utilities expense 300 utilities 300 6 Account receivable 380 Service fees earned 380 Income statement Rent expense 775 Service fee earned 5030 Supplies expense 1700 Depreciation 74 Wages 210 utilities expense 300 Profit 1971 5030 5030 Balance sheet Common stock 2000 Cash 1180 Retained earnings 5791 Accounts receivble 70 Prepaid rent 2325 Accounts payable 760 Suppies 820 Wages outstanding 210 Equipment 4366 8761 8761