Pitman Company is a small editorial services company owned and operated by Jan P
ID: 2552048 • Letter: P
Question
Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019 the end of the current year, Pitman Company’s accounting clerk prepared the following unadjusted trial balance:
Pitman Company
UNADJUSTED TRIAL BALANCE
October 31, 2019
1
Cash
7,710.00
2
Accounts Receivable
37,935.00
3
Prepaid Insurance
7,070.00
4
Supplies
2,125.00
5
Land
108,400.00
6
Building
145,300.00
7
Accumulated Depreciation-Building
85,610.00
8
Equipment
134,800.00
9
Accumulated Depreciation-Equipment
96,100.00
10
Accounts Payable
12,625.00
11
Unearned Rent
6,340.00
12
Jan Pitman, Capital
219,690.00
13
Jan Pitman, Drawing
15,120.00
14
Fees Earned
323,700.00
15
Salaries and Wages Expense
196,770.00
16
Utilities Expense
42,265.00
17
Advertising Expense
23,135.00
18
Repairs Expense
17,195.00
19
Miscellaneous Expense
6,240.00
20
Totals
744,065.00
744,065.00
The data needed to determine year-end adjustments are as follows:
Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.
Pitman Company
ADJUSTED TRIAL BALANCE
October 31, 2019
1
Cash
2
Accounts Receivable
3
Prepaid Insurance
4
Supplies
5
Land
6
Building
7
Accumulated Depreciation-Building
8
Equipment
9
Accumulated Depreciation-Equipment
10
Accounts Payable
11
Unearned Rent
12
Salaries and Wages Payable
13
Jan Pitman, Capital
14
Jan Pitman, Drawing
15
Fees Earned
16
Rent Revenue
17
Salaries and Wages Expense
18
Utilities Expense
19
Advertising Expense
20
Repairs Expense
21
Depreciation Expense-Building
22
Depreciation Expense-Equipment
23
Insurance Expense
24
Supplies Expense
25
Miscellaneous Expense
26
Totals
ACCOUNT TITLE DEBIT CREDIT1
Cash
7,710.00
2
Accounts Receivable
37,935.00
3
Prepaid Insurance
7,070.00
4
Supplies
2,125.00
5
Land
108,400.00
6
Building
145,300.00
7
Accumulated Depreciation-Building
85,610.00
8
Equipment
134,800.00
9
Accumulated Depreciation-Equipment
96,100.00
10
Accounts Payable
12,625.00
11
Unearned Rent
6,340.00
12
Jan Pitman, Capital
219,690.00
13
Jan Pitman, Drawing
15,120.00
14
Fees Earned
323,700.00
15
Salaries and Wages Expense
196,770.00
16
Utilities Expense
42,265.00
17
Advertising Expense
23,135.00
18
Repairs Expense
17,195.00
19
Miscellaneous Expense
6,240.00
20
Totals
744,065.00
744,065.00
Explanation / Answer
Adjusting Entries
Particulars Debit Credit 1) Prepaid Insurance at 31/10 - 6105 Insurance Expenses 965 Prepaid Insurance 965 2) Supplies on Hand at 31/10 - 485 Supplies Expense 1640 Supplies 1640 3)Depreciation on Building - 7140 Depreciation Expense-Building 7140 Accumulated Depreciation-Building 7140 4)Depreciation on equipment - 4445 Depreciation Expense-Equipment 4445 Accumulated Depreciation-Equipment 4445 5)Unearned Rent at 31/10 - 1890 Unearned Rent 4450 Rent Revenue 4450 6)Accrued Salaries at 31/10 - 3330 Salaries and Wages Expense 3330 Salaries and Wages Payable 3330 7)Fees earned but unbilled- 11475 Accounts Receivable 11475 Fees Earned 11475