Just Right Hair Stylists has begun the preparation of its worksheet as follows:

JUST RIGHT HAIR STYLISTS
Worksheet
December 31, 2018
Account Names	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$       300
Office Supplies	900
Equipment	20,600
Accumulated Depreciation - Equipment		$       700
Accounts Payable		500
Interest Payable
Note Payable		2,800
Common Stock		4,200
Service Revenue		17,500
Rent Expense	3,200
Supplies Expense
Depreciation Expense - Equipment
Interest Expense	700
Total	$ 25,700	$ 25,700

Year-end data include the following:

• a. Office supplies on han4 $300.
• b. Depreciation,$700.
• c. Accrued interest expense, $800.

Complete Just Right's worksheet through the adjusted trial balance section. In the adjustments section, mark each adjustment by letter.

Famous Cut Hair Stylists has begun the preparation of its adjusted trial balance as follows:

$$\begin{array}{c} \hline\text{FAMOUS CUT HAIR STYLISTS}\\ \text{Preparation of Adjusted Trial Balance}\\ \text{December 31, 2012}\\\hline \end{array}$$

Year-end data include the following: a. Supplies on hand, $300. b. Depreciation,$1,000. c. Accrued interest expense, $600.

Requirement

1. Complete Famous Cut’s adjusted trial balance. Key each adjustment by letter.

The accounting records of Mackay Architects include the following selected, unadjusted balances at March 31: Accounts Receivable, Sl,500; Office Supplies, $700; Prepaid Rent,$2,240; Equipment, $8,000; Accumulated Depreciation- Equipment,$0; Salaries Payable, $0; Unearned Revenue,$900; Service Revenue, $4,100; Salaries Expense,$800; Supplies Expense, $0; Rent Expense,$0; Depreciation Expense- Equipment, $0. The data developed for the March 31 adjusting entries are as follows:

• a. Service revenue accrued,$700.
• b. Unearned revenue that has been earned, $100.
• c. Office Supplies on hand,$300.
• d. Salaries owed to employees, $200.
• e. One month of prepaid rent has expired,$560.
• f. Depreciation on equipment, $120.

Requirements

1. Open a T-account for each account using the unadjusted balances given.
2. Journalize the adjusting entries using the letter and March 31 date in the date column.
3. Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account's adjusted balance.

Schaad’s Stews completed the following transactions during June, 2012:

Jun 1. Prepaid rent for June through September, $3,600. 2. Purchased computer for cash,$900. 3. Performed catering services on account, $2,300. 5. Paid Internet service provider invoice,$100. 6. Catered wedding event for customer and received cash, $1,500. 8. Purchased$150 of supplies on account. 10. Collected $1,200 on account. 14. Paid account payable from June 8. 15. Paid salary expense,$1,200. 30. Recorded adjusting entry for rent (see June 1). 30. Recorded $25 depreciation on computer. 30. There are$40 of supplies still on hand.

Requirement

1. Show whether each transaction would be handled as a revenue or an expense, using both the accrual and cash basis, by completing the following table.

$$\begin{array}{c} \textbf{Amount of Revenue (Expense) for June} \end{array}$$

$$\begin{array}{c|c|c} \hline &\text { Cash-Basis Amount }&\text { Accrual-Basis Amount } \\ \text { Date } &\text { of Revenue (Expense) } &\text { of Revenue (Expense) } \\\hline \text{Jun 1} \end{array}$$

At the end of June, Gallio Dental had performed $8,000 of dental services but has not yet billed customers.

Record the adjusting entry for accrued revenue.

In recording adjusting entries, Reagan Financial Advisors failed to record the adjusting entries for the following situations: a. Office supplies on hand, $100. b. Accrued revenues,$ 5,000. c. Accrued interest expense, $250. d. Depreciation,$ 800. e. Unearned revenue that has been earned, $ 550.

Determine the effects on the income statement and balance sheet by identifying whether assets, liabilities, equity, revenue, and expenses are either overstated or understated.

At the end of June, Gerber Dental had performed $9,000 of dental services but has not yet billed customers. Record the adjusting entry for accrued revenue.

S3-13 Seth's Tax Services had the following accounts and account balances after adjusting entries. Assume all accounts have normal balances.

$$\begin{array}{lrclr} \text{Cash}&\text{\$\hspace{28pt}?}&&\text{Equipment}&\text{\$\hspace{5pt}11,000}\\ \text{Land}&\text{26,000}&&\text{Accounts Receivable}&\text{4,950}\\ \text{Utilities Payable}&\text{150}&&\text{Office Supplies}&\text{700}\\ \text{Accounts Payable}&\text{3,700}&&\text{Common Stock}&\text{22,600}\\ \text{Accumulated Depreciation-Equipment}&\text{1,800}&&\text{Utilities Expense}&\text{1,650}\\ \text{Service Revenue}&\text{75,000}&&\text{Unearned Revenue}&\text{900}\\ \text{Supplies Expense}&\text{1,100}&&\text{Depreciation Expense-Equipment}&\text{1,900}\\ \text{Dividends}&\text{14,000}&&\text{Salaries Expense}&\text{5,600}\\ \end{array}$$

Prepare the adjusted trial balance for Seth's Tax Services as of December 31, 2018.

Laughter Landscaping has collected the following data for the December 31 adjusting entries:

• a. Each Friday, Laughter pays employees for the current week's work. The amount of the weekly payroll is $8,000 for a five-day workweek. This year, December 31 falls on a Tuesday. Laughter will pay its employees on January 3.
• b. On January 1 of the current year, Laughter purchases an insurance policy that covers two years,$8,000.
• c. The beginning balance of Office Supplies was $4,300. During the year, Laughter purchased office supplies for$5,600, and at December 31 the office supplies on hand total $1,500.
• d. During December, Laughter designed a landscape plan and the client prepaid$6,500. Laughter recorded this amount as Unearned Revenue. The job will take several months to complete, and Laughter estimates that the company has earned 40% of the total revenue during the current year.
• e. At December 31, Laughter had earned $3,000 for landscape services completed for Turnkey Appliances. Turnkey has stated that it will pay Laughter on January 10.
• f. Depreciation for the current year includes Equipment,$3,000; and Trucks, $2,200.
• g. Laughter has incurred$250 of interest expense on a $550 interest payment due on January 15.

Requirements

1. Journalize the adjusting entry needed on December 31 for each of the previous items affecting Laughter Landscaping. Assume Laughter records adjusting entries only at the end of the year.
2. Journalize the subsequent journal entries for adjusting entries a, d, and g.

Eastside Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period.

Requirements

1. Record the journal entry to record the original receipt of $180,000 cash.
2. Record the adjusting entry that Eastside Magazine makes to record earning 38,000 in subscription revenue that was collected in advance.
3. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances after adjustments. (Ignore the Cash account.)

The adjusted trial balance of Smith Sign Company follows:

$$\begin{array}{c} \textbf{SMITH SIGH COMPANY}\\ \textbf{Adjusted Trial Balance}\\ \textbf{January 31, 2016}\\ \end{array}$$

$$\begin{array}{lrr} \hline&\textbf{Debit}&\textbf{Credit}\\ \hline\text{Cash}&\$15,300&\\ \text{Office Supplies}&1,800&\\ \text{Prepaid Rent}&1,000&\\ \text{Equipment}&51,000&\\ \text{Accumulated Dep'n - Equipment}&&\$6,600\\ \text{Accounts Payable}&&4,300\\ \text{Salaries Payable}&&300\\ \text{Unearned Revenue}&&4,500\\ \text{Notes Payable (long-term)}&&4,900\\ \text{Common Stock}&&38,500\\ \text{Dividends}&1,000&\\ \text{Service Revenue}&&17,600\\ \text{Salaries Expense}&3,800\\ \text{Rent Expense}&1,500&\\ \text{Depreciation Expense - Equipment}&400\\ \text{Supplies Expense}&200&\\ \text{Utilities Expense}&700&\\ \hline & \$76,700&\$76,700\\ \hline\hline \end{array}$$

Requirements

1. Assume Smith Sign Company has a January 31 year-end. Journalize Smith's closing entries at January 31 .
2. How much net income or net loss did Smith earn for the year ended January 31? How can you tell?

Consider the following independent situations at December 31:

• a. On October 1, a business collected $3,000 rent in advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one year's rent in advance. On December 31, the business must account for the amount of rent it has earned.
• b. Salaries expense is$1,800 per day-Monday through Friday- and the business pays employees each Friday. This year, December 31 falls on a Thursday.
• c. The unadjusted balance of the Office Supplies account is $3,000. Office supplies on hand total$1,900.
• d. Equipment depreciation was $500.
• e. On April 1, when the business prepaid$4,320 for a two-year insurance policy, the business debited Prepaid Insurance and credited Cash.

Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.

On November 1, Carlisle Equipment had a beginning balance in the Office Supplies account of $600. During the month, Carlisle purchased$2,300 of office supplies. At November 30, Carlisle Equipment had SSOO of office supplies on hand.

Requirements

1. Open the Office Supplies T-account, and enter the beginning balance and purchase of office supplies.
2. Record the adjusting entry required at November 30.
3. Post the adjusting entry to the two accounts involved, and show their balances at November 30.

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?

On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero.

Requirements

1. Calculate the amount of depreciation for the month of October using the straight-line depreciation method.
2. Record the adjusting entry for depreciation on October 31.
3. Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation-Computer Equipment, and Depreciation Expense-Computer Equipment. Show their balances at October 31.
4. What is the computer equipment's book value on October 31?