Prepare adjusting entries. The company bought additional supplies in the amount of $735. At the end of the month, a physical inventory showed $343 of unused supplies. The company has a 12% note payable in the amount of $17,000 due in six months. The interest expense of $170 for the month has not been recorded. The company has two employees. The manager is paid on the fifteenth of every month for work performed during the first half of the month and on the first of the following month for work performed during the second half of the month. His monthly salary is $5,500. The other employee is paid $650 for each five-day work week (Monday to Friday). The last day of the month fell on Thursday. The unearned fees account shows a balance of $46,000. According to the manager, 60% of that amount has been earned. At the end of the month, $5,700 of services had been performed but not yet billed.
Accounts:
Unadjusted Trial Balance Adjusted Trial Balance
Debit Credit Debit Credit
Cash 13,000 13,000
Accounts Receivable 1,500 1,800
Prepaid Insurance 600 200
Supplies 3,800 3,000
Machines 30,000 30,000
Accumulated Depreciation 12,000 17,500
Wages Payable
Unearned Fees 6,700 6,500
Owner's Capital 24,000 24,000
Owner's Drawing 4,800 4,800
Fees Earned 25,000 25,500
Wages Expense 14,000 14,900
Depreciation Expense 5,506
Supplies Expense 500
Insurance Expense 400
67,700 67,700 74,400 74,400
