NESTOR MARTEL LAW OFFICE Trial Balance December 31, 20CY ACCOUNT TITLE Cash Accounts Receivable Prepaid Insurance Office Supplies Furniture and Equipment Accounts Payable Loan Payable Nestor Martel, Capital Nestor Martel, Drawing Fees Earned Salary Expense Advertising Expense Utilities Expense Miscellaneous Expense Totals
DEBIT 78,400.00 8,900.00 6,000.00 2,500.00 75,000.00
CREDIT
30,000.00 60,000.00 60,000.00 12,000.00 44,400.00 5,500.00 3,600.00 1,500.00 1,000.00 P 194,000.00
P 194,000.00
Additional Information:
1. The one year P 6,000.00 insurance paid was effective December 1. 2. Office rental of P 4,000.00 for the month of December was still unpaid. 3. Interest of 18% per annum on P 60,000.00 bank loan granted on December 11, has accrued. 4. Advertising placement of P 3,600 for three months was efective on December 1. 5. Fees of P 5,000.00 collected in advance on December 30 will be for services to be rendered next year. 6. Office supplies unused at the end of the month amounted to P 1,600.00. 7. Furniture and equipment are estimated to have a useful life of ten years. It was decided to provide one-month d Required:
Prepare the necessary adjusting journal entries on December 31.
d next year. provide one-month depreciation for December.
Solution 1. Insurance Expense Prepaid Insurance Computation: P 6,000/12 = 500 2. Rent Expense Accrued Expenses
500 500
4,000 4,000
3. Interest Expense 600 Accrued Expenses Computation: P 60,000 x 18% x 20/360 = 600 4. Prepaid Advertising Advertising Expense Computation: P 3,600.00x 2/3 = 2,400 5. Fees Earned Unearned
600
2,400 2,400
5,000.00 5,000.00
6. Supplies Expense Office Supplies Computation: P 2,500-1,600= 900
900
7. Depreciation Expense Accumulated Expense Computation: P 75,000.00/10 * 1/12
625
900
625
Jose Calves Realty Trial Balance December 31, 20CY ACCOUNT TITLE
DEBIT
CREDIT
Cash 30,250.00 Accounts Rec'ble 50,000.00 Notes Rec'ble 20,000.00 Accrued Interest Income Office supplies Prepaid insurance Office equipment 91,600.00 Accumulated depreciation 18,320 Accounts Payable 9250 Accrued Expenses Unearned Fees 12500 Capital 64,880 Drawing 40,400.00 Fees Earned 439,500 salary Expense 215,500.00 Rent Expense 55,000.00 Utilities Expense 16,500.00 Insurance Expense 7,200.00 Supplies Expense 5,400.00 Depreciation Expense Miscellaneous Expense 12,600.00 Interest Income Totals P 544,450.00 P 544,450.00
Additional information: 1. Office supplies used during the year was P 4050 2. One-year insurance premium was paid on April 1 of the current year 3. Office Equipment has a useful life of 10 years without salvage 4. Equal monthly rental for December was due but not yet paid.
5. Accrued fees earned but not yet collected P 10,000.00 6. Unpaid salaries and wages at December 31 was P 4,400 7. Unearned fees at December 31 was P 6,500.00 8. The 60-day , 12% Note Rec'ble was received on December 1. Prepare the necessary adjusting journal entries.
Complete the solution: 1. Office supplies Supplies expense Computation: 5400 - 4050 = 1350
1350
2. Prepaid Insurance Insurance Expense Computation: 7200/12*9 = 5400
5400
3. Depreciation Expense Accumulated Depreciation Computation: 91600/10 = 9160
9160
4. Rent Expense Accrued expenses Computation:
5000
5. Accounts Rec'ble Fees earned 6. Salary Exepnse Accrued Expense
1350
5400
9160
5000
10000 10000 4400 4400
7. Unearned Fees Fees earned Computation: 8. Accrued Interest Income 1200 Interest Income Computation: 20000*.12*30/60 = 1200
1200
