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
Debit
Balances Credit
Balances
Cash 4,610
Accounts Receivable 41,830
Prepaid Insurance 7,800
Supplies 2,130
Land 123,020
Building 301,960
Accumulated Depreciation—Building 150,320
Equipment 147,830
Accumulated Depreciation—Equipment 107,070
Accounts Payable 13,120
Unearned Rent 7,440
Jan Pitman, Capital 321,100
Jan Pitman, Drawing 16,310
Fees Earned 354,520
Salaries and Wages Expense 211,290
Utilities Expense 46,440
Advertising Expense 24,820
Repairs Expense 18,790
Miscellaneous Expense 6,740
953,570 953,570
The data needed to determine year-end adjustments are as follows:
Unexpired insurance at October 31, $5,230.
Supplies on hand at October 31, $640.
Depreciation of building for the year, $3,460.
Depreciation of equipment for the year, $3,000.
Unearned rent at October 31, $1,930.
Accrued salaries and wages at October 31, $3,380.
Fees earned but unbilled on October 31, $19,850.
Required:
Question Content Area
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.
a.
Insurance Expense
2,570
Prepaid Insurance
2,570
b.
Supplies Expense
1,490
Supplies
1,490
c.
Depreciation Expense-Building
3,460
Accumulated Depreciation-Building
3,460
d.
Depreciation Expense-Equipment
3,000
Accumulated Depreciation-Equipment
3,000
e.
Unearned Rent
5,510
Rent Revenue
5,510
f.
Salaries and Wages Expense
3,380
Salaries and Wages Payable
3,380
g.
Accounts Receivable
19,850
Fees Earned
19,850
Feedback Area
Feedback
1. Before you begin, identify which adjusting entry goes with which additional account. As you go through each of these, consider the other sides of the adjusting entry transaction and identify related accounts. Keep in mind that you will be making an adjusting entry for each of these that affects at least one income statement account (revenues or expenses) and one balance sheet account (assets or liabilities). In the case of the insurance transaction, you will have to calculate the amount of insurance expired. In the case of supplies, you will need to calculate the amount of supplies used (expense). In the case of rent, you will need to calculate the amount of rent earned (revenue).
Question Content Area
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.
Pitman Company
Adjusted Trial Balance
October 31, 2019
Debit Balances Credit Balances
Salaries and Wages Payable
Salaries and Wages Payable
Salaries and Wages Payable
Rent Revenue
Rent Revenue
Rent Revenue
Insurance Expense
Insurance Expense
Insurance Expense
Accumulated Depreciation-Building
Accumulated Depreciation-Building
Accumulated Depreciation-Building
Accumulated Depreciation-Equipment
Accumulated Depreciation-Equipment
Accumulated Depreciation-Equipment
Supplies Expense
Supplies Expense
Supplies Expense
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