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Question & Answer: Preparing an Unadjusted Trial Balance SnapShot Company. a commercial photography studio, has just completed its first full year of…..

Preparing an Unadjusted Trial Balance SnapShot Company. a commercial photography studio, has just completed its first full year of operations on December 31. 2013. 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 $12,900 Accounts Payable $11,460 Accounts Receivable 22,800 Unearned Photography Fees 15,600 144,000 Prepaid Insurance 17,820 Photography Fees Earned 206,880 66,000 20,520 Prepaid Rent 75,600 Common Stock Supplies 25,500 Wages Expense 136,800 Utilities Expense An analysis of the firms records discloses the following. 1. Photography services of $5,550 have been rendered, but customers have not yet paid or been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. 2. Equipment. purchased January 1, 2013, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $2,400, but the bill will not arrive or be paid until January of next year. 4. The balance in Prepaid Rent represents the amount paid on January 1, 2013, for a 2-year lease on the studio. 5. In November, customers paid $15,600 cash in advance for photos to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31. all of these fees are earned. 6. A 3-year insurance premium paid on January 1, 2013, was debited to Prepaid Insurance. 7. Supplies available at December 31 are $9,120 8. At December 31, wages expense of $2.250 has been incurred but not paid or recorded.

(b) Prepare its adjusting entries: (1) using the financial statement effects template, and (2) in journal entry form.

(c) Set up T-accounts, including beginning balances, and post the journal entries to those T-accounts on the appropriate line.
After all transactions are recorded, compute the balance for each account in the appropriate column

Preparing an Unadjusted Trial Balance SnapShot Company. a commercial photography studio, has just completed its first full year of operations on December 31. 2013. 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 $12,900 Accounts Payable $11,460 Accounts Receivable 22,800 Unearned Photography Fees 15,600 144,000 Prepaid Insurance 17,820 Photography Fees Earned 206,880 66,000 20,520 Prepaid Rent 75,600 Common Stock Supplies 25,500 Wages Expense 136,800 Utilities Expense An analysis of the firm’s records discloses the following. 1. Photography services of $5,550 have been rendered, but customers have not yet paid or been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. 2. Equipment. purchased January 1, 2013, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $2,400, but the bill will not arrive or be paid until January of next year. 4. The balance in Prepaid Rent represents the amount paid on January 1, 2013, for a 2-year lease on the studio. 5. In November, customers paid $15,600 cash in advance for photos to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31. all of these fees are earned. 6. A 3-year insurance premium paid on January 1, 2013, was debited to Prepaid Insurance. 7. Supplies available at December 31 are $9,120 8. At December 31, wages expense of $2.250 has been incurred but not paid or recorded.

Expert Answer

 

(b) (1)

(2)

(c)

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