Data Needed to Determine Adjustments
a. On July 31st, Geyser Pool provided design services for clients, but was unable to generate invoices for 35 hours of work performed before the month ended. Geyser charges $40/hour for its design services_
b. Supplies on hand at July 31, $275.
c. Geyser purchased a 1-year comprehensive insurance policy covering liability, theft, and fire on July 1st for $2,700.
d. Depreciation on the office equipment is $50.
e. The balance of the unearned revenue account represents a 2-month pre-payment by a customer made on July 1st. The service Will be earned evenly.
f Accrued wages as of July 31, 2016 were $140.
The unadjusted tnal balance of Geyser Pool Company as of July 31, 2016, along with adjustment data for the two months ended July 31, 2016, are shown below.
Geyser began operations on June 1, 2016.
Geyser Pool Company
Unadjusted Trial Balance
July 31, 2016
Account Debit Credit
Cash
Accounts Receivable Supplies
Prepaid Insurance Office Equipment $ 9,945
2,750 1,020 2,700 7,500
Accounts Payable $ 8,350
Unearned Revenue 7,200
Steven Water, Capital 9,000
Steven Water, Drawing 1,750
Fees Earned 16,200
Blueprint Expense 3,610
Wages Expense 2,800
Office Rent Expense 2,550
Advertising Expense 1,500
Equipment Rent Expense 1,375
Utilities Expense 1,215
Supplies Expense 180
Miscellaneous Expense 1,855
Totals $ 40,750 $ 40,750
Instructions (NOTE: Instructions 1-5 can be completed after Chapter 3 is learned):
1. For each account listed in the Unadjusted Trial Balance, open up T accounts and label the account balance as "Urst.ADJ"
2. Prepare adjusting journal entries using the data on the back of the page.
3. Post the adjusting journal entries to the T accounts labeling the debit/credit as "ADJ".
4. Total the T accounts labeling the ending balance as "ADJ BAL".
5. Prepare an Adjusted Trial Balance as of July 31, 2016.
6. Prepare an Income Statement for the two months ended July 31, 2016.
7. Prepare a statement of owner's equity for the two months ended July 31, 2016. (NOTE: Steven Water made only one investment in Geyser, on June 1st).
8. Prepare a classified balance sheet at July 31, 2016.
9. Journalize the closing entries. You do not need to post them to the T accounts.
10. Prepare a post-dosing trial balance as of July 31, 2016.