Option #1: Preparing Adjusting Entries in a Worksheet
I need an explanation for this Accounting question to help me study.
Option #1: Preparing Adjusting Entries in a Worksheet
Following is the unadjusted trial balance of Skylar Gaming, Inc. at the end of its first year of operations, December 31, 20×7:
|
Account Name |
DR. |
CR. |
|
Cash |
$71,550 |
|
|
Accounts Receivable |
$25,200 |
|
|
Supplies |
$550 |
|
|
Prepaid Insurance |
$12,000 |
|
|
Equipment |
$31,750 |
|
|
Accumulated Depreciation-Equipment |
$4,050 |
|
|
Accounts Payable |
$6,700 |
|
|
Salaries Payable |
$0 |
|
|
Unearned Revenue |
$2,200 |
|
|
Common Stock |
$45,700 |
|
|
Retained Earnings |
$23,850 |
|
|
Dividends |
$3,500 |
|
|
Revenue |
$80,750 |
|
|
Depreciation Expense-Equipment |
$2,000 |
|
|
Salaries Expense |
$4,750 |
|
|
Insurance Expense |
$3,100 |
|
|
Rent Expense |
$4,200 |
|
|
Supplies Expense |
$2,500 |
|
|
Utilities Expense |
$2,150 |
|
|
$163,250 |
$163,250 |
The following additional information is available:
- Skylar Gaming, Inc. needs to accrue $2,000 in salaries that will not be paid until next month.
- Skylar Gaming, Inc. has earned $2,000 of the services that were paid for in advance as included in the unearned revenue account.
- At the end of the period, Skylar Gaming, Inc. has provided services in the amount of $500 to another customer (John Gartner). However, Skylar has not billed them yet since they only issue bills at the beginning of each month.
- Skylar Gaming, Inc. needs to record the annual $1,025 of depreciation on the equipment.
- One month of the 12-month insurance policy in prepaid insurance has been used up, and a journal entry is needed to reflect this.
- At the end of the period, $125 in supplies are remaining.
Required: Using the template in the Module 3 folder, complete the following:
- Prepare all necessary adjusting entries at December 31, 20×7 Descriptions are not needed.
- Prepare an adjusted trial balance at December 31, 20×7.
- Columns listed on the worksheet as income statement, statement of retained earnings, and balance sheet should be completed.
- Prepare closing entries including descriptions.
Review the grading rubric to understand how you will be graded on this assignment. Review Module 3 Part 1 Lecture: Sections 3, 4, and 5 for examples related to your Critical Thinking assignment for this week. Reach out to your instructor if you have questions about the assignment.
Note: The template required for this assignment is located in the Module 3 folder.
