Download ps_music_unadjusted_trial_balance_july_question

The unadjusted trial balance that you prepared for PS Music at the end of Chapter 2
should appear as follows:
PS Music
UNADJUSTED TRIAL BALANCE
July 31, 2016
ACCOUNT TITLE
DEBIT
CREDIT
1
Cash
9,945.00
2
Accounts Receivable
2,750.00
3
Supplies
1,020.00
4
Prepaid Insurance
2,700.00
5
Office Equipment
7,500.00
6
Accounts Payable
8,350.00
7
Unearned Revenue
7,200.00
8
Common Stock
9,000.00
9
Dividends
10
Fees Earned
11
Wages Expense
2,800.00
12
Office Rent Expense
2,550.00
13
Equipment Rent Expense
1,375.00
14
Utilities Expense
1,215.00
1,750.00
16,200.00
ACCOUNT TITLE
DEBIT
15
Music Expense
3,610.00
16
Advertising Expense
1,500.00
17
Supplies Expense
180.00
18
Miscellaneous Expense
1,855.00
19
Totals
40,750.00
CREDIT
40,750.00
The data needed to determine adjustments are as follows:
During July, PS Music provided guest disc jockeys for KXMD for a total of 115
hours. Since the company only contracted for 80 hours per month, make an
adjusting entry to accrue the additional 35 hours of service. NOTE: The unearned
revenue account will not be affected in this adjustment. For information on the
amount of the accrued revenue to be billed to KXMD, see the contract described in
• the July 3, 2016, transaction at the end of Chapter 2.*
• Supplies on hand at July 31, $275.
The balance of the prepaid insurance account relates to the July 1, 2016, transaction
• at the end of Chapter 2.*
• Depreciation of the office equipment is $50.
The balance of the unearned revenue account relates to the contract between PS
Music and KXMD, described in the July 3, 2016, transaction at the end of Chapter
• 2.*
Accrued wages as of July 31, 2016, were $140.
•
1.
*The chapter 2 list of transactions are included in a
separate panel of this problem for your convenience.
Prepare adjusting journal entries on page
3 of the journal. (Please note that pages 1
and 2 show the transactions that were
recorded in Continuing Problem 2 from
chapter 2.) Refer to the Chart of Accounts
for exact wording of account titles. Note
that Chart of Accounts has the following
additional accounts: 18 Accumulated
Depreciation-Office Equipment; 22 Wages
Payable; 57 Insurance Expense; 58
Depreciation Expense.
2.
Post the adjusting entries, inserting
balances in the accounts affected. Do not
enter anything in the Item column. Indicate
a zero balance by inserting a 0 (zero) in
either of the Balance columns opposite the
adjusting entry.
3.
Prepare an adjusted trial balance.
Chapter 2 transactions:
Jul. 1
Peyton Smith made an additional investment in PS Music in exchange for
common stock by depositing $5,000 in PS Music’s checking account.
1
Instead of continuing to share office space with a local real estate agency,
Peyton decided to rent office space near a local music store. Paid rent for July,
$1,750.
1
Paid a premium of $2,700 for a comprehensive insurance policy covering
liability, theft, and fire. The policy covers a one-year period.
2
Received $1,000 on account.
3
On behalf of PS Music, Peyton signed a contract with a local radio station,
KXMD, to provide guest spots for the next three months. The contract requires
PS Music to provide a guest disc jockey for 80 hours per month for a monthly
fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40
per hour. In accordance with the contract, Peyton received $7,200 from
KXMD as an advance payment for the first two months.
3
Paid $250 on account.
4
Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record
as Miscellaneous Expense.)
5
Purchased office equipment on account from Office Mart, $7,500.
8
Paid for a newspaper advertisement, $200.
11 Received $1,000 for serving as a disc jockey for a party.
Paid $700 to a local audio electronics store for rental of digital recording
13 equipment.
14 Paid wages of $1,200 to receptionist and part-time assistant.
16 Received $2,000 for serving as a disc jockey for a wedding reception.
18 Purchased supplies on account, $850.
Paid $620 to Upload Music for use of its current music demos in making
21 various music sets.
Paid $800 to a local radio station to advertise the services of PS Music twice
22 daily for the remainder of July.
Served as disc jockey for a party for $2,500. Received $750, with the
23 remainder due August 4, 2016.
27 Paid electric bill, $915.
28 Paid wages of $1,200 to receptionist and part-time assistant.
29 Paid miscellaneous expenses, $540.
Served as a disc jockey for a charity ball for $1,500. Received $500, with the
30 remainder due on August 9, 2016.
31 Received $3,000 for serving as a disc jockey for a party.
Paid $1,400 royalties (music expense) to National Music Clearing for use of
31 various artists’ music during July.
31 Paid dividends, $1,250.
X
Chart of Accounts
CHART OF ACCOUNTS
PS Music
General Ledger
ASSETS
11 Cash
REVENUE
41 Fees Earned
12 Accounts Receivable
EXPENSES
14 Supplies
50 Wages Expense
15 Prepaid Insurance
51 Office Rent Expense
17 Office Equipment
52 Equipment Rent Expense
18 Accumulated Depreciation-Office Equipment
53 Utilities Expense
LIABILITIES
54 Music Expense
21 Accounts Payable
55 Advertising Expense
22 Wages Payable
56 Supplies Expense
23 Unearned Revenue
57 Insurance Expense
58 Depreciation Expense
EQUITY
31
Common Stock
33
Dividends
59 Miscellaneous Expense
Journal:
1. Prepare adjusting journal entries. (Please note that pages 1 and 2 show the
transactions that were recorded in Continuing Problem 2 from chapter 2.) Refer to
the Chart of Accounts for exact wording of account titles. Note that Chart of Accounts
has the following additional accounts: 18 Accumulated Depreciation-Office
Equipment; 22 Wages Payable; 57 Insurance Expense; 58 Depreciation Expense.
Journal is set up with the following columns:
Date:
Description:
Post Ref:
Debit
Credit
I need page 3 set up only, (adjusting entries), as pages one and two are done.
3. Prepare an adjusted trial balance.
PS Music
ADJUSTED TRIAL BALANCE
July 31, 2016
ACCOUNT TITLE
1
Cash
2
Accounts Receivable
3
Supplies
4
Prepaid Insurance
5
Office Equipment
6
Accumulated Depreciation-Office Equipment
7
Accounts Payable
DEBIT
CREDIT
ACCOUNT TITLE
8
Wages Payable
9
Unearned Revenue
10
Common Stock
11
Dividends
12
Fees Earned
13
Wages Expense
14
Office Rent Expense
15
Equipment Rent Expense
16
Utilities Expense
17
Music Expense
18
Advertising Expense
19
Supplies Expense
20
Insurance Expense
21
Depreciation Expense
22
Miscellaneous Expense
23
Totals
DEBIT
CREDIT