Accounting Application

Mr McAdams starts his own firm called, McAdams Consulting on June 1, 2011.   The trial balance at June 30, 2011 is shown below.


McAdams Consulting
Trial Balance
30 June 2011

Account Number Accounts Debit
$ Credit
$
101 Cash 7,150
112 Accounts Receivable 6,000
126 Supplies 2,000
130 Prepaid Insurance 3,000
157 Office Equipment 15,000
201 Accounts Payable 4,500
209 Unearned Service Revenue 4,000
311 Share   Capital – Ordinary 21,750
400 Service Revenue 7,900
726 Salaries Expense 4,000
729 Rent Expense 1,000
$38,150 $38,150






In addition to those accounts listed on the trial balance, the chart of accounts for McAdams also contains the following accounts and account numbers:-
No. 158 Accumulated Depreciation – Office Equipment, No. 212   Salaries Payable, No. 244   Utilities Payable, No. 631   Supplies Expense, No.711   Depreciation Expense, No. 722   Insurance Expense, and No. 732   Utilities Expense.


Other information:-
1. Supplies on hand at June 30 are $600.
2. A utility bill for $150 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $2,500 of unearned service revenue has been earned at the end of the month.
5. Salaries of $2,000 are accrued at June 30.
6. The office equipment has a 5-year life with no salvage value.   It is being depreciated at $250 per month for 60 months.
7. Invoices representing $1,000 of services performed during the month have not been recorded as of June 30.
Instructions

(a) Prepare the adjusting entries for the month of June.  

(b) Prepare the ledger accounts.   Enter the totals from the trial balance as beginning account balances.   Post the adjusting entries to the ledger accounts.  

(c) Prepare the Unadjusted Trial Balance, Adjustments and Adjusted Trial Balance in the columnar worksheet provided for the month of June.





(a)
                        McAdams Consulting... [continues]

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