Galloway Company is a small editorial services company owned and operated by Fran Briggs. On July 31, 2012, the end of the current year, Galloway Company’s accounting clerk prepared the unadjusted trial balance shown below.
Unadjusted Trial Balance
July 31, 2012
Accounts Receivable 38,400
Prepaid Insurance 7,200
Accumulated Depreciation-Building 137,550
Accumulated Depreciation-Equipment 97,950
Accounts Payable 12,150
Unearned Rent 6,750
Salaries and Wages Payable –
Fran Briggs, Capital 221,000
Fran Briggs, Drawing 15,000
Fees Earned 324,600
Rent Revenue –
Salaries and Wages Expense 193,370
Utilities Expense 42,375
Advertising Expense 22,800
Repairs Expense 17,250
Depreciation Expense-Building –
Depreciation Expense-Equipment –
Insurance Expense –
Supplies Expense –
Miscellaneous Expense 6,075
Total $800,000 $800,000
The data needed to determine year-end adjustments are as follows:
a. Unexpired insurance at July 31, $4,800.
b. Supplies on hand at July 31, $600.
c. Depreciation of building for the year, $3,100.
d. Depreciation of equipment for the year, $2,700.
e. Rent unearned at July 31, $1,750.
f. Accrued salaries and wages at July 31, $3,000.
g. Fees earned but unbilled on July 31, $10,750.
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.
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.