Question

At year-end, the following additional information is available: a. The balance of Prepaid Rent, $4,920, represents payment on October 31, 2018, for rent from November 1, 2018, to April 30, 2019. b. The balance of Deferred Revenue, $1,100, represents payment in advance from a customer. By the end of the year, $275 of the services have been provided. c. An additional $700 in salaries is owed to employees at the end of the year but will not be paid until January 4, 2019. d. The balance of Supplies, $2,100, represents the amount of office supplies on hand at the beginning of the year of $750 plus an additional $1,350 purchased throughout 2018. By the end of 2018, only $610 of supplies remains.

Answer 1

Question Completion:

The December 31, 2018, unadjusted trial balance for Demon Deacons Corporation is presented below.

 

Accounts                      Debit       Credit

Cash                          $ 8,100

Accounts Receivable 13,100

Prepaid Rent              4,920

Supplies                      2,100

Deferred Revenue                     $ 1,100

Common Stock                           11,000

Retained Earnings                       4,100

Service Revenue                      37,520

Salaries Expense   25,500

Total                    $ 53,720  $ 53,720

Use the following additional information to prepare the adjusted Trial Balance.

Answer:

Demon Deacons Corporation

Adjusted Trial Balance

As of December 31, 2018

Accounts                      Debit       Credit

Cash                          $ 8,100

Accounts Receivable 13,100

Prepaid Rent              3,280

Supplies                         610

Deferred Revenue                      $ 825

Common Stock                           11,000

Retained Earnings                       4,100

Salaries Payable                            700

Service Revenue                      37,795

Rent Expense            1,640

Salaries Expense   26,200

Supplies Expense     1,490

Total                    $ 54,420  $ 54,420

Explanation:

a) Data and Analysis:

a. Rent Expense $1,640 Prepaid Rent, $1,640 ($4,920 * 2/6) rent from November 1, 2018, to April 30, 2019.

b. Deferred Revenue, $275 Service Revenue $275

c. Salaries Expense $700 Salaries Payable $700

d. Supplies Expense $1,490 Supplies $1,490

Accounts                      Debit       Credit

Cash                          $ 8,100

Accounts Receivable 13,100

Prepaid Rent              4,920 - 1,640 = 3,280

Supplies                      2,100 - 1,490 = 610

Deferred Revenue                     $ 1,100 -275 = 825

Common Stock                           11,000

Retained Earnings                       4,100

Salaries Payable                            700

Service Revenue                      37,520 + 275 = 37,795

Rent Expense            1,640

Salaries Expense   25,500 + 700 = 26,200

Supplies Expense     1,490

Total                    $ 53,720  $ 53,720