Problem E3-14December 31, unadjusted trial balance for Demon Deacons Corp.Accounts Debit CreditCash $10,000 Accounts Receivable 15,000 Prepaid Rent 7,200 Supplies 4,000 Deferred Revenue $3,000Common Stock 11,000Retained Earnings 6,000Service Revenue 51,200Salaries Expense 35,000 Totals $71,200 $71,200a) The balance of Prepaid Rent, $7,200, represents payment on Oct 31, 2018 for rent from Nov 1, 2018-April 30, 2019.b) Deferred Revenue, $3,000, represents payment in advance from customer. By the end of the year $750 of the services have been provided.c) An additional $700 in salaries owed to employees at the end of the year but will not be paid until Jan 4, 2019.d) The balance of Supplies, $4,000, represents the amount of office supplies on hand at the beginning of the year of $1,700 plus and additional $2,300 purchased throughout 2018. By the end of 2018, only $800 of supplies remains.1. Update account balances by recording adjusting entries.2. Prepare adjusted trial balance.

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TomShelby TomShelby · Answer 1 · 2019-10-24T00:56:57+02:00

Answer:

rent expense 2400

Prepaid Rent 2400

--expired rent--

Deferred Revenue 750

Service Revenue 750

--acrued revenue--

Salaries expense 700

salaries payable 700

--accrued salaries--

Supplies 3200

supplies expense 3200

--supplies used--

The trial balance is attached.

Explanation:

a) 7,200 is the contract value for 6 months

we divide by 6 month and then, we multiply by 2 month accrued for the year (november and december)

b)we decrease the portion earned and recognize the gain

c) we recognize a liability and the wages expense associate for this wages

d) the difference between the book value and supplies on hand will be considered consumption so, supplies expense

For the ajusted trial balance, we will adjust the balance of eahc account considering the beginning balance