Final

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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  DRCR DRCR  DRCR 
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