Q43PGB - Horngren'S Financial And Managerial Accounting

Question

Galaxy Theater Production Company’s partially completed worksheet as of December 31, 2018, follows.

Galaxy Theater Production Company
Worksheet
December 31, 2018
Account Names	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	\(  3,600
Accounts Receivables	5,700
Office Supplies	1,500
Prepaid Insurance	900
Equipment	23,000
Accumulated Depreciation – Equipment		\)  8,500
Accounts Payable		4,600
Salaries Payable
Common Stock		9,900
Dividends	26,000
Service Revenue		72,000
Depreciation Expense – Equipment
Supplies Expense
Utilities Expense	4,300
Salaries Expense	30,000
Insurance Expense
Total	\( 95,000	\) 95,000

Adjustment data at December 31 follow:

a. As of December 31, Galaxy had performed \(900 of service revenue but has not yet billed customers.

b. At the end of the month, Galaxy had \)500 of office supplies remaining.

c. Prepaid Insurance of \(600 remained.

d. Depreciation expense, \)4,200.

e. Accrued salaries expense of $150 that hasn’t been paid yet.

Requirements

1. Complete the worksheet. Use letters a through e to label the five adjustments.

2. Journalize the adjusting entries.

Step-by-Step Solution

Answer

Total of adjusted trial balance: $100,250

Step 1: Preparation of worksheet

Galaxy Theater Production Company
Worksheet
December 31, 2018
Account Names	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$  3,600				$  3,600
Accounts               (a) Receivables	5,700		$  900		6,600
Office Supplies     (b)	1,500			$  1,000	500
Prepaid Insurance (c)	900			300	600
Equipment	23,000				23,000
Accumulated         (d) Depreciation – Equipment		$  8,500		4,200		$ 12,700
Accounts Payable		4,600				4,600
Salaries Payable     (e)				150		150
Common Stock		9,900				9,900
Dividends	26,000				26,000
Service Revenue   (a)		72,000		900		72,900
Depreciation Expense – Equipment          (d)			4,200		4,200
Supplies Expense (b)			1,000		1,000
Utilities Expense	4,300				4,300
Salaries Expense    (e)	30,000		150		30,150
Insurance Expense (c)			300		300
Total	$ 95,000	$ 95,000	$ 6,550	$ 6,550	$ 100,250	$  100,250

Step 2: Recording of adjusting entry

Date	Particular	Debit	Credit
a)	Accounts Receivable	$   900
	Service Revenue		$   900
	Being billed customers for providing services
b)	Supplies Expense	1,000
	Office Supplies		1,000
	Being office supplies used
c)	Insurance Expense	300
	Prepaid Insurance		300
	Being Prepaid insurance expired
d)	Depreciation Expense	4,200
	Accumulated Depreciation		4,200
	Being depreciation incurred for the period
e)	Salaries Expense	150
	Accrued Salaries		150
	Being salary outstanding for the period
	Total	$ 6,550	$ 6,550