Q47PS - Horngren'S Financial And Managerial Accounting

Question

This problem continues the Crystal Clear Cleaning situation from Chapter 2. Start from the unadjusted trial balance that Crystal Clear Cleaning prepared at November 30, 2018:

Crystal Clear Cleaning
Unadjusted Clear Cleaning
November 30, 2018
		Balance
Account Title	Debit	Credit
Cash	\( 51,650
Accounts Receivables	4,000
Cleaning Supplies	320
Prepaid Rent	4,000
Prepaid Insurance	4,800
Equipment	5,400
Truck	3,000
Accounts Payable		\)  1,245
Unearned Revenue		15,000
Notes Payable		36,000
Common Stock		18,000
Dividends	1,400
Service Revenue		5,100
Salaries Expense	400
Advertising Expense	200
Utilities Expense	175
Total	\( 75,345	\) 75,345

Consider the following adjustment data:

a. Cleaning supplies on hand at the end of November were \(50.

b. One month’s combined depreciation on all depreciable assets was estimated to be \)150.

c. One month’s interest expense is $59.

 

Requirements

1. Using the data provided from the trial balance, the previous adjustment information, and the information from Chapter 2, prepare all required adjusting journal entries at November 30.

 

2. Prepare an adjusted trial balance as of November 30 for Crystal Clear Cleaning.

Step-by-Step Solution

Answer

Adjusted trail balance matched at $75,854

Step 1: Recording of journal entry

Date	Particular	Debit	Credit
a.	Supplies Expense	$  270
	Cleaning supplies		$  270
	Being supplies expense incurred
b.	Depreciation Expense	150
	Accumulated Depreciation		150
	Being depreciation incurred
c.	Interest expense	59
	Accrued Interest		59

Step 2: Adjusted trial balance

Crystal Clear Cleaning
Unadjusted Clear Cleaning
November 30, 2018
		Balance
Account Title	Debit	Credit
Cash	$ 51,650
Accounts Receivables	4,000
Cleaning Supplies	50
Prepaid Rent	4,000
Prepaid Insurance	4,800
Equipment	5,400
Truck	3,000
Accounts Payable		$     1,245
Unearned Revenue		15,000
Notes Payable		36,000
Common Stock		18,000
Dividends	1,400
Service Revenue		5,100
Salaries Expense	400
Advertising Expense	200
Utilities Expense	175
Supplies Expense	270
Depreciation Expense	150
Accumulated Depreciation		150
Interest Expense	59
Accrued Interest		59
Total	$ 75,554	$ 75,554