Final

/in /by

Final

QUESTION 1 40% points                          
Jake’s consulting Inc. does consulting business and provides auxiliary services for businesses. Their unadjusted  Trial Balance (TB)      
and adjusted Trial Balance worksheets at 31-DEC-2012 are provided below.                
                           
31-Dec-12  UNADJUSTED TB    ADJUSTMENTS   ADJUSED TB   CLOSING ENTRIES  
   DR   CR    DR CR   DR CR     DR CR  
Cash         42,000                        
Accounts Receivable         18,000                        
Supplies           7,000                        
Prepaid Insurance         12,000                        
Furniture           8,000                        
Accumulated depreciation, furniture               3,200                      
Buildings         75,000                        
Accumulated depreciation, buildings               6,000                      
Accounts Payable             13,000                      
Salaries and wages payable                      –                 Retained Earnings      
Unearned Consulting Revenue               2,500               Dividends      
Dividends         10,500                 Consulting Revenues      
Common Shares               2,000               Auxiliary Revenues      
Retained Earnings             26,000               Retained Earnings      
Consulting Revenue           183,000               Retained Earnings      
Auxiliary Revenue               2,000               Depreciation  – Furn      
Depreciation Expense, Furniture                  –                   Depreciation  – Bldg      
Depreciation Expense, Buildings                  –                   Salaries      
Salaries Expense         25,000                 Insurance      
Insurance Expense           6,000                 Rent      
Rent Expense         12,000                 Supplies      
Supplies Expense         14,000                 Advertising      
Advertising Expense           7,000                 Telephone      
Telephone Expense           1,200                        
       237,700         237,700                  –                  –                    –                  –                        –                    –    
                           
                           
   1. The company paid $12,000 for a 12 month insurance policy on March 31, 2012.       
   At that time, it was correctly recorded as prepaid insurance.           
   2. A supply count reveals $3,000 of supplies are remaining at year-end.         
   3.  The furniture was purchased several yers ago for $8,000.  At that time it was estimted       
   that the furniture would be useful for 5 years. Adjustment for a full year of depreciation is necessary       
   4. The buildings were purchased several years ago for $75,000.  At that time it was estimated that the       
   buildings would be useful for 25 years.  An adjustment for a full year of depreciation is required.       
   5. Four employees were due to be paid two days of salaries.  These employees each typically       
   receive $300 per day.                       
   6. On October 1, 2012, the company signed a 4-month contract to provide auxiliary services       
   to a small business.  The contract called for the company to receive $10,000 at the       
   end of the contract on January 31, 2013.                 
   7.  On September 1, 2012, the company signed a 5 month consulting contract with a client.       
   The client paid $2,500 in advance for the 5 months of  service and that amount was       
   correctly recorded as unearned consulting revenue at that time.           
                           
REQUIRED:  a. Calculate the adjusting entries and adjusted TB.             
   b. Calculate the closing entries