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problem: Customers still more operates a private investigating agency called still more investigations. Some customers pay in advance for services; others are billed after services have been performed. Advanced payments are credited to an account entitled unearned retainer fees. Adjusting entries are performed on a monthly basis, the unadjusted trial balance accounts as of Dec. 31, 2008 are provided to you in random order as follows:

[Considering that adjusting entries have been made for the 1st eleven months of 2008, but not for the month of December]

 

DR

 

CR

Cash                               

$40,585

 

 

 

 

 

Office equipment

 

54,000

 

 

 

 

Accounts payable

 

 

 

 

1,400

 

Unearned retainer fees

 

 

 

3,500

 

 

Accounts receivable

 

2,000

 

 

 

 

Retained earnings

 

 

 

 

8,000

 

Office supplies

 

205

 

 

 

 

Prepaid rent

 

 

1,200

 

 

 

Accumulated depreciation office equipment

35,250

 

 

 

 

 

Unexpired insurance

 

270

 

 

 

 

Dividends

 

 

 

 

 

1,000

 

 

 

Client fees earned

 

 

 

 

 

 

60,000

 

 

Interest payable

 

 

 

 

 

 

360

 

 

Capital stock

 

 

 

 

 

 

 

30,000

 

Depreciation expense-office equipment

8,250

 

 

 

 

 

 

 

 

Income tax payable

 

 

 

 

 

 

1,750

 

 

Notes payable

 

 

 

 

 

 

 

9,000

 

Office supplies expense

 

605

 

 

 

 

 

   

Rent expense

 

 

 

 

5,775

 

 

 

 

Insurance expense

 

 

 

1,010

 

 

 

 

 

Salaries expense

 

 

 

27,100

 

 

 

 

 

Interest expense

 

 

 

360

 

 

 

 

 

Income tax expense

 

 

6,900

 

 

 

 

   

 

 

 

 

 

 

__________________________________

     

 

 

 

 

Totals

 

 

$149,260

 

$149,260

Other Information:

[A] Accrued but unrecorded client fees earned at Dec. 31 amounted to $1500

[B] records show that $2500 of cash receipts originally recorded as unearned retainer fees had been earned as of dec. 31

[C] office supplies on hand at Dec 31 amounts to $110

[D] the company purchased all of its office equipment when it first began business at that time the equipment estimated useful life was 6 years

[E] on oct. 1,2008 the company renewed its rental agreement paying $1,800 cash for 6 months rent in advance

[F] on march 1 of the current year the company paid $1080 cash to renew its 12 month insurance policy

[G] accrued but unrecorded salaries at Dec. 31 amount to $1900

[H] On June 1, 2008 the company borrowed money from the bank by signing a $9000, 8 percent, 12 month note payable. The entire note plus 12 months accrued interest is due on May 31 2009

[I] the company's CPA estimates that income taxes expense for the entire year is $7500

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920649

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