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Chapter 3: 30E_2 (page 168)

Question :The worksheet of Macey’s Landscaping Services follows but is incomplete. Requirements 1. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 2. Describe each adjusting entry. For example, a. Prepaid rent expires, $1,150.

Short Answer

Expert verified

(a) Prepaid rent expires, $1,150.

(b)Office supplies used, $350.

(c) Depreciation on equipment, $1,300.

(d) Depreciation on trucks, $1,900.

(e) Unearned revenue earned, $3,200

(f) Salaries owed to employees, $7,200

(g) Interest expense accrued, $300.

(h) Service revenue accrued, $3,500.

Step by step solution

01

Step-by-Step-SolutionStep1: Explanation on Adjusting Entries

These are the year end entries, which are recorded to report the accrued revenues and expenses in the financial statements.

02

Explanation on Adjustments

In the adjustment section, total debits and credis equals $18,900.

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Most popular questions from this chapter

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

Protection Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Protection Home has collected \(900 from cash-paying customers. Protection Home’s remaining customers owe the business \)1,300. How much service revenue would Protection Home have for the year under the a. cash basis? b. accrual basis?

Protection Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Protection Home has collected \(900 from cash-paying customers. Protection Home’s remaining customers owe the business \)1,300. How much service revenue would Protection Home have for the year under the a. cash basis? b. accrual basis?

Question:Seth’s Tax Services had the following accounts and account balances after adjusting entries. Assume all accounts have normal balances.Cash Land Accounts Payable Utilities Payable Accumulated Depreciation—Equipment Service Revenue Supplies Expense Dividends \( ? 26,000 150 3,700 1,800 75,000 1,100 14,000 Equipment Accounts Receivable Common Stock Office Supplies Utilities Expense Unearned Revenue Depreciation Expense—Equipment Salaries Expense \) 11,000 4,950 700 22,600 1,650 900 1,900 5,600Prepare the adjusted trial balance for Seth’s Tax Services as of December 31, 2018.

Which method of accounting (cash or accrual basis) is consistent with Generally Accepted Accounting Principles?
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