Prepare adjusting journal entries

Assignment Help Financial Accounting

Reference no: EM133516742

Assignment: Principles of Accounting

The unadjusted trial balance that you prepared for PS Music at then end of Chapter 2 should appear as follows:

PS Music Unadjusted Trial Balance July 31, 20Y5
	Account No.	Debit Balances	Credit Balances
Cash	11	9,945
Account Receivable	12	2,750
Supplies	14	1,020
Prepaid Insruance	15	2,700
Office Equipment	17	7,500
Accounts Payable	21		8,350
Unearned Revenue	23		7,200
Common Stock	31		9,000
Dividends	33	1,750
Fees Earned	41		16,200
Wages Expense	50	2,800
Office Rent Expense	51	2,550
Equipment Rent Expense	52	1,375
Utilities Expense	53	1,215
Music Expense	54	3,610
Advertising Expense	55	1,500
Supplies Expense	56	180
Miscellaneous Expense	59	1,855
		40,750	40,750

The data needed to determine adjustments are as follows:

July 31 During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. For information on the amount of the accured revenue to be billed to KXMD, see the contract described in the July 3 transaction at the end of Chapter 2.

"On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide guest disc jockey for 80 hours per month for a fee of $3,500. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months."

31 Supplies on hand at July 31, $275

31 The balance of the prepaid insurance account relates to the July 1 transaction at the end of Chapter 2
"Paid a premium of $2,700 for comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period."

31 Depreciation of the office equipment is $50.

31 The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3
transaction at the end of Chapter 2.

31 Accrued wages as of July 31 were $140

Task

I. Prepare adjusting journal entries. You will need the following additional accounts:

18 Accumulated Depreciation-Office Equipment
22 Wages Payable
57 Insurance Expense
58 Depreciation Expense

II. Post the adjusting entries, inserting balances in the accounts affected.

III. Prepare an adjusted trial balance.

Reference no: EM133516742

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