Week 2

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Adjustment data at December 31 follow: a. As of December 31, Newport had $600 of Prepaid Insurance remaining. b. At the end of the month, Newport had $700 of office supplies remaining. c. Depreciation on the building is $3,500. d. Newport pays its employees weekly on Friday. Its employees earn $1,500 for a five-

day workweek. December 31 falls on Wednesday this year. e. On November 20, Newport contracted to perform services for a client receiving $2,500

in advance. Newport recorded this receipt of cash as Unearned Revenue. As of December 31, Newport has $1,500 still unearned.

Requirements

1. Journalize the adjusting entries on December 31. 2. Using the unadjusted trial balance, open the accounts (use a four-column ledger) with

the unadjusted balances. Post the adjusting entries to the ledger accounts. 3. Prepare the adjusted trial balance. 4. Assuming the adjusted trial balance has total debits equal to total credits, does this

mean that the adjusting entries have been recorded correctly? Explain.

2. d. CR Accumulated Depreciation $3,800

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P3-37A Using the worksheet to record the adjusting journal entries

Learning Objective 6

Ganville Theater Production Company’s partially completed worksheet as of December 31, 2016, follows.

Requirements

1. Analyze the worksheet to determine the adjusting entries that account for the differences between the unadjusted trial balance and the adjusted trial balance. Complete the worksheet. Use letters a through e to label the five adjustments.

2. Journalize the adjusting entries.

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