Martin Editing Company is a small editorial services company owned and operated by Andrew Martin. On August 31, 20Y1, the end of the current year, Martin Editing Company's accounting clerk prepared the following unadjusted trial balance:
Martin Editing Company
UNADJUSTED TRIAL BALANCE
August 31, 20Y1
ACCOUNT TITLE DEBIT CREDIT
1 Cash 7,500.00
2 Accounts Receivable 38,400.00
3 Prepaid Insurance 7,200.00
4 Supplies 1,980.00
5 Land 112,500.00
6 Building 150,250.00
7 Accumulated Depreciation-Building 87,550.00
8 Equipment 135,300.00
9 Accumulated Depreciation-Equipment 97,950.00
10 Accounts Payable 12,150.00
11 Unearned Rent 6,750.00
12 Common Stock 75,000.00
13 Retained Earnings 146,000.00
14 Dividends 15,000.00
15 Fees Earned 324,600.00
16 Salaries and Wages Expense 193,370.00
17 Utilities Expense 42,375.00
18 Advertising Expense 22,800.00
19 Repairs Expense 17,250.00
20 Miscellaneous Expense 6,075.00
21 Totals 750,000.00 750,000.00
The data needed to determine year-end adjustments are as follows:
- Unexpired insurance at August 31, $1,800.
- Supplies on hand at August 31, $300.
- Depreciation of building for the year, $7,500.
- Depreciation of equipment for the year, $6,000.
- Rent unearned at August 31, $2,250.
- Accrued salaries and wages at August 31, $2,175.
- Fees earned but unbilled on August 31, $12,700.
Required:
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense-Building; Depreciation Expense-Equipment; and Supplies Expense.
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.