Question Lincoln Service Co., which specializes in appliance r

05 Jun Question Lincoln Service Co., which specializes in appliance r

Question
Lincoln Service Co., which specializes in appliance repair services, is owned and operated by Molly Jordan. Lincoln Service Co.’s accounting clerk prepared the following unadjusted trial balance at December 31, 2008, shown below.

Lincoln Service Co. Unadjusted Trial Balance December 31, 2008

Debit

Credit

Balances

Balances

Cash

2,100

Accounts Receivable

10,300

Prepaid Insurance

3,000

Supplies

1,725

Land

50,000

Building

80,750

Accumulated Depreciation—Building

37,850

Equipment

44,000

Accumulated Depreciation—Equipment

17,650

Accounts Payable

3,750

Unearned Rent

3,600

Molly Jordan, Capital

83,550

Molly Jordan, Drawing

2,500

Fees Earned

128,600

Salaries and Wages Expense

50,900

Utilities Expense

14,100

Advertising Expense

7,500

Repairs Expense

6,100

Miscellaneous Expense

2,025

275,000

275,000

The data needed to determine year-end adjustments are as follows:

a. Depreciation of building for the year, $3,500.

b. Depreciation of equipment for the year, $2,300.

c. Accrued salaries and wages at December 31, $1,100.

d. Unexpired insurance at December 31, $750.

e. Fees earned but unbilled on December 31, $3,250.

f. Supplies on hand at December 31, $525.

g. Rent unearned at December 31, $1,500.

Instructions

1. Journalize the adjusting entries. Add additional accounts as needed.

2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.