EX 3-10 Adjusting entry for accrued fees

At the end of the current year, $8,450 of fees have been earned but have not been billed to
clients.
a. Journalize the adjusting entry to record the accrued fees.

Account D K
Wages expense 8.450
Account payable 8.450

b. If the cash basis rather than the accrual basis had been used, would an adjusting
entry have been necessary? Explain.
We don’t need it, because it does not issue cash / receive cash

PR 3-5A Adjusting entries and adjusted trial balances

Dickens Company is a small editorial services company owned and operated by
Monica Baker. On October 31, 2014, the end of the current year, Dickens Company’s
accounting clerk prepared the unadjusted trial balance shown below.
The data needed to determine year-end adjustments are as follows:

a. Unexpired insurance at October 31, $5,400.

b. Supplies on hand at October 31, $375.
c. Depreciation of building for the year, $6,000.
d. Depreciation of equipment for the year, $3,000.
e. Rent unearned at October 31, $1,350.
f. Accrued salaries and wages at October 31, $2,900.
g. Fees earned but unbilled on October 31, $18,600.
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.
 Account D K

Insurance expense 1.800

Prepaid insurance 1.800
Supplies expense 1.605
Supplies 1.605
Depreciation Expense Building 6.000
Accumulated Depreciation Building 6.000
Depreciation Expense Equipment 3.000
Accumulated Depreciation Equipment 3.000
Unearned rent 5.400
Rent Revenue 5.400
Salaries and Wages expense 2.900
Salaries and Wages Payable 2.900
Accounts receivable 18.600
Fees earned 18.600

39.305 39.305

2. Determine the balances of the accounts affected by the adjusting entries, and
prepare an adjusted trial balance
CASH
D K
7.500

ACCOUNTS RECEIVABLE
D K
38.400
18.600

PREPAID INSURANCE
D K
7.200
1.800

SUPPLIES
D K
1.980
1.605
LAND
 D K
112.500

BUILDING
D K
150.250

ACCUMULATED DEPRECIATION BUILDING

D K
87.550
6.000

EQUIPMENT
D K
135.300

ACCUMULATED DEPRECIATION EQUIPMENT

D K
97.950
3.000

ACCOUNT PAYABLE
D K
12.150

SALARIES AND WAGES PAYABLE

D K
2.900

UNEARNED RENT
D K
6.750
5.400

MONICA BAKER, CAPITAL

D K
221.000

MONICA BAKER, DRAWING

D K
15.000

FEES EARNED
D K
324.600
 18.600

RENT REVENUE
D K
5.400

SALARIES AND WAGES EXPENSE

D K
193.370
2.900

UTILITIES EXPENSE
D K
42.375

ADVERTISING EXPENSE
D K
22.800

REPAIRS EXPENSE
D K
17.250

MISCELLANEOUS EXPENSE
D K
6.075

INSURANCE EXPENSE
D K
1.800

SUPPLIES EXPENSE
D K
1.605

DEPRECIATION EXPENSE BUILDING

D K
6.000

DEPRECIATION EXPENSE EQUIPMENT

D K
3.000
 ADJUSTED TRIAL BALANCE
31St OCTOBER 2014

ACCOUNTS D K
Cash 7.500
Accounts receivable 57.000
Prepaid insurance 5.400
supplies 375
Land 112.500
Building 150.250
Accumulated depreciation building 93.550
Equipment 135.300
Accumulated depreciation equipment 100.950
Account payable 12.150
Salaries and wages payable 2.900
Unearned rent 1.350
Monica baker, capital 221.000
Monica baker, drawing 15.000
Fees earned 343.200
Rent revenue 5.400
Salaries and wages expense 196.270
Utilities expense 42.375
Advertising expense 22.800
Repairs expense 17.250
Miscellaneous expense 6.075
Insurance expense 1.800
Supplies expense 1.605
Depreiation expense building 6.000
Depreciation expense equipment 3000
780.500 780.500