The unadjusted trial balance for All Mopped Up Company, a cleaning service, is as follows:

$$\begin{array}{c} \textbf{ALL MOPPED UP COMPANY}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{December 31, 2018} \end{array}$$

$$\begin{array}{lrr} {\textbf{Account Title}}&\textbf{Debit\hspace{6pt}}&\textbf{Credit\hspace{4pt}}\\ \text{Cash}&\text{\$\hspace{18pt}800}\\ \text{Office Supplies}&\text{2,000}\\ \text{Prepaid Insurance}&\text{600}\\ \text{Equipment}&\text{30,000}\\ \text{Accumulated Depreciation- Equipment}&&\text{\$\hspace{10pt}2,000}\\ \text{Accounts Payable}&&\text{2,400}\\ \text{Salaries Payable}\\ \text{Unearned Revenue}&&\text{700}\\ \text{Common Stock}&&\text{15,300}\\ \text{Dividends}&\text{5,000}\\ \text{Service Revenue}&&\text{25,000}\\ \text{Salaries Expense}&\text{7,000}\\ \text{Supplies Expense}\\ \text{Depreciation Expense- Equipment}\\ \text{Insurance Expense}&\text{\underline{\hspace{38pt}}}&\text{\underline{\hspace{38pt}}}\\ \text{Total}&\underline{\underline{\$\hspace{5pt}\text{45,400}}}&\underline{\underline{\$\hspace{5pt}\text{45,400}}}\\ \end{array}$$

During the 12 months ended December 31, 2018, All Mopped Up:

• a. used office supplies of $1,700.
• b. used prepaid insurance of$580.
• c . depreciated equipment, $500.
• d. accrued salaries expense of$310 that hasn't been paid yet.
• e. earned $400 of unearned revenue.

Requirements

1. Open a T-account for each account using the unadjusted balances.
2. Journalize the adjusting entries using the letter and December 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.

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.

Identify the errors in the following trial balance. All accounts have normal balances.

$$\begin{array}{c} \textbf{Ensemble Co.}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{For the Year Ending December 31, 2018} \end{array}$$

$$\begin{array}{lrr} &\textbf{Debit}\hspace{7pt}&\textbf{Credit}\hspace{5pt}\\ &\textbf{Balances}&\textbf{Balances}\\ \text{Cash}&\text{42,900}\\ \text{Accounts Receivable}&&\text{123,500}\\ \text{Prepaid Insurance}&\text{27,000}\\ \text{Equipment}&\text{300,000}\\ \text{Accounts Payable}&\text{52,000}\\ \text{Salaries Payable}&&\text{4,800}\\ \text{Common Stock}&&\text{40,000}\\ \text{Retained Earnings}&&\text{137,200}\\ \text{Dividends}&&\text{5,000}\\ \text{Service Revenue}&&\text{1,216,000}\\ \text{Salary Expense}&\text{660,000}\\ \text{Advertising Expense}&&\text{275,000}\\ \text{Miscellaneous Expense}&\underline{\hspace{13pt}\text{16,600}}&\underline{\hspace{41pt}}\\ &\underline{\text{1,801,500}}&\underline{\text{1,801,500}}\\ \end{array}$$

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

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.

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.

The following table summarizes the rules of debit and credit. For each of the items A through L, indicate whether the proper answer is a debit or a credit.

$$\begin{array}{l } \text{}&{}&\textbf{Increase}&{}&\textbf{Decrease}&{}&\textbf{Normal Balance}\\ \textbf{Balance sheet accounts:}&\\ \text{Asset}&{}&\text{A}&{}&\text{B}&{}&\text{Debit }\\ \text{Liability}&{}&\text{C}&{}&\text{Debit}&{}&\text{D}\\ \text{Stockholders’ equity:}&\\ \text{Common Stock}&{}&\text{Credit}&{}&\text{E}&{}&\text{F }\\ \text{Retained Earnings}&{}&\text{G}&{}&\text{H}&{}&\text{Credit}\\ \text{Dividends }&{}&\text{Debit}&{}&\text{Credit}&{}&\text{I}\\ \textbf{Income statement accounts:}&\\ \text{Asset}&{}&\text{J}&{}&\text{K}&{}&\text{Credit }\\ \text{Liability}&{}&\text{L}&{}&\text{Credit}&{}&\text{Debit}\\ \end{array}$$

Ken Jones, an architect, organized Jones Architects on April 1, 2014. During the month, Jones Architects completed the following transactions:

a. Transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $18,000. b. Purchased used automobile for$19,500, paying $2,500 cash and giving a note payable for the remainder. c. Paid April rent for office and workroom,$3,150. d. Paid cash for supplies, $1,450. e. Purchased office and computer equipment on account,$6,500. f. Paid cash for annual insurance policies on automobile and equipment, $2,400. g. Received cash from a client for plans delivered,$12,000. h. Paid cash to creditors on account, $1,800. i. Paid cash for miscellaneous expenses,$375. j. Received invoice for blueprint service, due in May, $2,500. k. Recorded fee earned on plans delivered, payment to be received in May,$15,650. l. Paid salary of assistant, $2,800. m. Paid cash for miscellaneous expenses,$200. n. Paid installment due on note payable, $300. o. Paid gas, oil, and repairs on automobile for April,$550.

nstructions

1. Record the above transactions directly in the following T accounts, without journalizing: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Accounts Payable, Capital Stock, Professional Fees, Rent Expense, Salary Expense, Blueprint Expense, Automobile Expense, Miscellaneous Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.
2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
3. Prepare an unadjusted trial balance for Jones Architects, as of April 30, 2014.
4. Determine the net income or net loss for April

Fantastic Catering completed the following selected transactions during May 2016: May 1. Prepaid rent for three months, $1,800. 5. Received and paid electricity bill,$200. 9. Received cash for meals served to customers, $1,900. 14. Paid cash for kitchen equipment,$3,300. 23. Served a banquet on account, $3,600. 31. Made the adjusting entry for rent (from May 1 ). 31. Accrued salary expense,$1,300. 31. Recorded depreciation for May on kitchen equipment, $55.

Requirements

1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example.

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

$$\begin{array}{lcc} \hline \text{Date} & \text{Cash Basis Amount of Revenue (Expense)} & \text{Accrual Basis Amount of Revenue (Expense)} \\ \hline \text{May 1} & \$(1,800) & \$ 0 \\ \hline \end{array}$$

2. After completing the table, calculate the amount of net income or net loss for Fantastic Catering under the accrual basis and cash basis accounting systems for May.
3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Fantastic Catering? Why?

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 August 1, 2014, Rafael Masey established Planet Realty, which completed the following transactions during the month:

a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $17,500. b. Purchased supplies on account,$2,300. c. Earned sales commissions, receiving cash, $13,300. d. Paid rent on office and equipment for the month,$3,000. e. Paid creditor on account, $1,150. f. Paid dividends,$1,800. g. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses,$400. h. Paid office salaries, $2,800. i. Determined that the cost of supplies used was$1,050.

Instructions

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Capital Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Journal entry explanations may be omitted.
2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.
3. Prepare an unadjusted trial balance as of August 31, 2014.
4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for August.
5. Determine the increase or decrease in retained earnings for August

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.

On October 1 a business collected $ 3,000 in 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. Prepare the adjusting entry on December 31.

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.

Which one of the statements below is not a purpose for the journal?

A. To show increases and decreases in accounts

B. To show a chronological order by date

C. To show a complete transaction in one place

D. To help locate errors