Cloud Break Consulting has the following information at June 30, 2014:
CLOUD BREAK CONSULTING
Unadjusted Trial Balance
June 30, 2014
Account Title
Debit
Credit
Cash
P
131,000
Accounts receivable
104,000
Supplies
4,000
Prepaid rent
27,000
Land
45,000
Building
300,000
Accumulated depreciation-building
P 155,000
Accounts payable
159,000
Unearned service revenue
40,000
Moe, capital
102,000
Moe, drawing
7,000
Service revenue
450,000
Salary expense
255,000
Rent expense
25,000
Miscellaneous expense
8,000
Total
P 906,000
P 906,000
Cloud Break must make adjusting entries for the following items:
a. Supplies on hand at year-end, $1,000.
b. Nine months of rent ($27,000) were paid in advance on April 1, 2014.
c. Depreciation expense on the building of $12,000 has not been recorded.
d. Employees work Monday through Friday. The weekly payroll is $5,000 and is paid
every Friday. June 30, 2014, is a Monday.
e. Service revenue of $15,000 must be accrued.
f. Cloud Break received $40,000 in advance for consulting services to be provided
evenly from January 1, 2014, through August 31, 2014. None of the revenue from this
client has been recorded.
Requirements
1. Open the ledger T-accounts with their unadjusted balances.
2. Journalize Cloud Break's adjusting entries at June 30, 2014, and post the entries to the
T-accounts.
3. Prepare the complete work sheet.
