Answer Happy

Trial Balance and Adjusting Entries Photomake, Inc., a commercial photography studio, has just completed its first full year of operations on December 31. The general ledger account balances before year-end adjustments follow. No adjusting entries have been made to the accounts at any time during the year. Assume that all balances are normal. Cash Accounts Receivable Prepaid Rent Prepaid Insurance Supplies Equipment $3,010 Accounts Payable 5,320 Unearned Photography Fees 17,640 Common Stock 4,158 Photography Fees Earned 5,950 Wages Expense 31,920 Utilities Expense $2,674 3,640 33,600 48,272 15,400 4,788 An analysis of the firm's records discloses the following items: 1. Photography services of $1,295 have been rendered, but customers have not yet been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. 2. The equipment, purchased January 1, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $560 but the bill will not arrive until January of next year. 4. The balance in Prepaid Rent represents the amount paid on January 1, for a 2 year lease on the studio. 5. In November, customers paid $3,640 in advance for pictures to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31, all fees are earned. 6. A 3 year insurance premium paid on January 1, was debited to Prepaid Insurance. 7. Supplies on hand at December 31 are $3,010 8. At December 31, wages expense of $525 has been incurred but not paid.
Required a. Prove that the sum of the debits equals the sum of the credits for Photomake's unadjusted account balances by preparing an unadjusted trail balance as of December 31. PHOTOMAKE, Inc. Unadjusted Trial Balance December 31 Debit Credit Cash $ $ Accounts Receivable Prepaid Rent Prepaid Insurance Supplies Equipment Accounts Payable Unearned Photography Fees Common Stock Photography Fees Earned Wages Expense Utilities Expense Totals $ $
b. Record adjusting entries in the general journal. General Journal Date Description Dec. 31 Ref. Debit Credit . (1) $ $ . To record revenue earned but not billed. 31 (2) To record depreciation for the year. 31 (3) To record estimated December utilities expense. 31 . (4) (4 To record rent expense for the year. 31 (5) A To record advance payments earned during the year. 31 (6) To record insurance expense for the year. 31 (7) To record supplies expense for the year. 31 (8) To record unpaid wages at December 31.
✓ Accumulated Depreciation - Equipment Advertising Expense Depreciation Expense Fees Receivable Insurance Expense Interest Expense Interest Payable Photography Fees Earned Prepaid Advertising Prepaid Insurance Prepaid Rent Rent Expense Supplies Supplies Expense Unearned Photography Fees Utilities Expense Utilities Payable Wages Expense Wages Payable