Part -1:
The unadjusted trial balance at 3o June 2017 for Maxi Services Ltd is as follows.
MAXI SERVICES LTD
Trial balance
as at 30 June 2017
|
NO.
|
ACCOUNT NAME
|
DEBIT
|
CREDIT
|
|
100
|
Cash
|
$ 54 800
|
|
|
104
|
Accounts Receivable
|
15 000
|
|
|
112
|
Prepaid Insurance
|
3 200
|
|
|
113
|
Supplies
|
1500
|
|
|
130
|
Office Equipment
|
3o 000
|
|
|
131
|
Accumulated Depreciation
|
|
$ 20 000
|
|
200
|
Accounts Payable
|
|
7 400
|
|
213
|
Service Revenue Received in Advance
|
|
4 000
|
|
300
|
Share Capital
|
|
6o 000
|
|
310
|
Retained Earnings
|
|
7 500
|
|
400
|
Service Revenue
|
|
46 800
|
|
500
|
Salaries Expense
|
34 000
|
|
|
510
|
Rent Expense
|
2 000
|
|
|
515
|
Insurance Expense
|
1 200
|
|
|
530
|
Electricity Expense
|
4 000
|
|
The chart of accounts for Maxi Services Ltd contains the following accounts in addition to those listed on the trial balance: 218 Electricity Payable, 215 Salaries Payable, 52o Depreciation Expense, and 505 Supplies Expense.
Other data:
1. Supplies on hand at 3o June total $l000.
2. An electricity bill for $300 for June has not been recorded and will not be paid until next month.
3. The balance of the prepaid insurance account is the annual premium for insurance commencing 1 January 2017.
4. Services were performed during the current period in relation to $3000 of Revenue Received in Advance.
5. Salaries of $4600 are owed at 3o June.
6. Depreciation expense for the year is $4000.
7. Invoices representing $4400 of services performed during the month have not been recorded as of 3o June 2017.
Required
a. Prepare the adjusting entries from the information provided.
b. Using T accounts, enter the totals from the trial balance as beginning account balances and then post the adjusting entries to the ledger accounts.
c. Prepare an adjusted trial balance as at 3o June 2017.
Part -2:
Con James commenced a dental practice on 1 January 2016. During the first month of operations the following transactions occurred.
a. Performed services for patients and, at 31 January, $1500 was earned for these services but not yet billed to the patients.
b. Electricity expense incurred and not paid or recorded prior to 31 January, $1040.
c. Purchased dental equipment on 1 January 2016 for $160 000, paying $40 000 in cash and signing a $120 000 interest-bearing note payable. (Interest is payable on 31 December 2016.) The equipment depreciates at $1600 per month and interest on the note is $500 per month.
d. Purchased a i-year insurance policy on 1 January 2016 for $24 000.
e. Purchased $3200 of dental supplies (recorded as an asset). On 31 January, $700 worth of supplies was still on hand.
Required
Prepare the adjusting entries on 31 January 2016. Use these account names: Accumulated Depreciation-Dental Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Interest Expense, Insurance Expense, Salaries Expense, Interest Payable, Prepaid Insurance and Salaries Payable.
Prepare adjusting entries.