Question

The following are the trial balance and other information related to Soft Tech, a

consulting engineer.
Soft Tech, Consulting Engineer
Trial Balance
December 31, 2022
Debit Credit
Cash Br. 59,000
Accounts Receivable 99,200
Allowance for Doubtful Accounts Br. 1,500
Supplies 3,920
Prepaid Insurance 2,200
Equipment 50,000
Accumulated Depreciation—Equipment 12,500
Notes Payable 14,400
Share, Capital 104,020
Dividend 34,000
Service Revenue 200,000
Rent Expense 19,500
Salaries and Wages Expense 61,000
Utilities Expense 2,160
Office Expense 1,440
Br. 332,420 Br. 332,420
Other data:
1. Fees received in advance from clients Br.12,000.
2. Services performed for clients that were not recorded by December 31,
Br.9,800.
3. Bad debt expense for the year is Br.2,860.
4. Insurance expired during the year Br.960.
5. Equipment is being depreciated at 10% per year.
6. Fine Tech gave the bank a 90-day, 10% note for Br.14,400 on December 1,
2022.
7. Rent of the building is Br.1,500 per month. The rent for 2022 has been
paid, as has that for January 2023.
8. Salaries and wages earned but unpaid December 31, 2022, Br.5,020.

Answer 1

The following is the adjusted trial balance for Soft Tech, Consulting Engineer as of December 31, 2022:

Debit Credit

Cash Br. 59,000

Accounts Receivable 107,000

Allowance for Doubtful Accounts Br. 1,500

Supplies 3,920

Prepaid Insurance 1,240

Equipment 50,000

Accumulated Depreciation—Equipment 13,500

Notes Payable 14,400

Share, Capital 104,020

Dividend 34,000

Service Revenue 209,800

Rent Expense 20,700

Salaries and Wages Expense 66,020

Utilities Expense 2,160

Office Expense 1,440

Unearned Service Revenue 12,000

Bad Debt Expense 2,860

Depreciation Expense 5,000

Unpaid Salaries and Wages Expense 5,020

Br. 337,960 Br. 337,960

Note:

• Fees received in advance from clients are recorded as unearned service revenue and added to liability side.

• Services performed for clients that were not recorded by December 31 added to service revenue.

• Bad debt expense for the year is recorded as an expense.

• Insurance expired during the year is recorded as an expense.

• Equipment depreciation is calculated based on the year-end balance of equipment and the rate of 10%.

• Note payable for the bank is recorded on the liability side.

• Rent for January 2023 is recorded as an expense.

• Salaries and wages earned but unpaid December 31, 2022, is recorded as an expense.