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The December 31, 2021, unadjusted trial balance for Demon Deacons Corporation is presented below. Accounts Debit Credit Cash $ 10,000 Accounts Receivable 15,000 Prepaid Rent 7,200 Supplies 4,000 Deferred Revenue $ 3,000 Common Stock 11,000 Retained Earnings 6,000 Service Revenue 51,200 Salaries Expense 35,000 $ 71,200 $ 71,200 At year-end, the following additional information is available: The balance of Prepaid Rent, $7,200, represents payment on October 31, 2021, for rent from November 1, 2021, to April 30, 2022. The balance of Deferred Revenue, $3,000, represents payment in advance from a customer. By the end of the year, $750 of the services have been provided. An additional $700 in salaries is owed to employees at the end of the year but will not be paid until January 4, 2022. The balance of Supplies, $4,000, represents the amount of office supplies on hand at the beginning of the year of $1,700 plus an additional $2,300 purchased throughout 2021. By the end of 2021, only $800 of supplies remains. 2. Prepare an adjusted trial balance as of December 31, 2021.

Respuesta :

Shahzaibfaraz

Answer:

Adjusted Trial Balance as of Dec 31,2021

Particulars                        Debit                Credit

 

Cash                                10000 Dr  

Accounts Receivable        15000 Dr

Prepaid Rent                  4800 Dr

Supplies                                   800 Dr

Deferred revenue                                          2250  Cr

Common Stock                                         11000  Cr

Retained earnings                                  6000  Cr

Revenue                                                         51950  Cr

Salaries Expense               35700 Dr

Supplies Expense                 3200 Dr  

Rent Expense                 2400 Dr

Salaries Payable                                             700  Cr

 

                                       71900 Total Dr       71900  Total Cr

Explanation:

1. Prepaid rent is for 6 months from Nov 2021 to April 2022.

Per month rent is 7200/6 = 1200

Rent expense will be charged for 2 months Nov & Dec 2400. Prepaid Rent will be reduced by this amount.

2. Deferred rev of 750 has been earned and will be added to revenue and reduced from deferred revenue.

3. Salaries payable will be created by 700 and salaries expense will be increased by 700 due to 700 salaries owed.

4. The office supplies consumed during the year is 4000 - 800 = 3200. This will be charged as supplies expense and reduced from supplies account.

Answer:

Please find the answer as well as workings below

Explanation:

Before we start answering the question, we will provide the question in a format that is easy to understand.

December 31, 2018, un-adjusted trial balance for Demon Deacon Corporations  

Accounts      Debit ($)    Credit ($)

Cash      10, 000

Accounts receivables   15, 000

Prepaid rent     7, 200

Supplies             4, 000

Deferred revenue                                                                   3, 000

Common Stock          11, 000

Retained earnings                                                    6, 000

Service revenue         51, 200

Salaries expense    35, 000

              71, 200    71, 200

Before we can prepare the adjusted trial balance, we will record adjusting journal entries on the general journal.

31 December 2018

     Dr ($)     Cr ($)

Rent expense     2400

Prepaid rent expense       2, 400

An adjustment for prepaid rent expense

Salaries Expenses    700

 Salaries payable         700

Adjustment for salaries accrued

Accrued income     750

Service revenue         750

Adjustment for accrued income

 

Supplies expense    3, 200

Supplies          3, 200

Adjustment for used supplies

The next step is to determine the closing balances for the accounts that have been adjusted

1. Prepaid rent:

The $7, 200 balance is for the full 6 months. We have 2 months that have expired already, being, November and December.  The remaining 4 months is what should be the balance.

$7,200 x 4/6 = $4, 800

2. Accrued income:

Deferred revenue (opening balance)  $3, 000

Adjusted (revenue earned)          ($     750)

Accrued income (closing balance) $2, 250

Service revenue (opening balance)  $51, 200

Adjustment                     $       750

Closing balance             $51, 950

Salaries expense (opening balance) $35, 000

Adjustment                     $       700

Closing balance            $35, 700

Supplies (unadjusted)    $4, 000

Adjustment            ($     800)

Closing balance            $3, 200

 

Demon Deacon Corporation

         Adjusted Trial Balance

      31 December, 2018

Accounts      Debit ($)    Credit ($)

Cash      10, 000

Accounts receivables   15, 000

Prepaid rent      4, 800

Supplies                800

Deferred revenue             2, 250

Common Stock             11, 000

Retained earnings                    6, 000

Salaries payable                  700

Service revenue                     5, 950

Supplies expense     3, 200

rent expense     2, 400

Salaries expense    35, 700

      71, 900     71, 900

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