Answer:
Please find the answer as well as workings below
Step-by-step explanation:
Before we start answering the question, we will provide the question in a format that is easy to understand.
December 31, 2018, un-adjusted trial balance for Demon Deacon Corporations
Accounts Debit ($) Credit ($)
Cash 10, 000
Accounts receivables 15, 000
Prepaid rent 7, 200
Supplies 4, 000
Deferred revenue 3, 000
Common Stock 11, 000
Retained earnings 6, 000
Service revenue 51, 200
Salaries expense 35, 000
71, 200 71, 200
Before we can prepare the adjusted trial balance, we will record adjusting journal entries on the general journal.
31 December 2018
Dr ($) Cr ($)
Rent expense 2400
Prepaid rent expense 2, 400
An adjustment for prepaid rent expense
Salaries Expenses 700
Salaries payable 700
Adjustment for salaries accrued
Accrued income 750
Service revenue 750
Adjustment for accrued income
Supplies expense 3, 200
Supplies 3, 200
Adjustment for used supplies
The next step is to determine the closing balances for the accounts that have been adjusted
1. Prepaid rent:
The $7, 200 balance is for the full 6 months. We have 2 months that have expired already, being, November and December. The remaining 4 months is what should be the balance.
$7,200 x 4/6 = $4, 800
2. Accrued income:
Deferred revenue (opening balance) $3, 000
Adjusted (revenue earned) ($ 750)
Accrued income (closing balance) $2, 250
Service revenue (opening balance) $51, 200
Adjustment $ 750
Closing balance $51, 950
Salaries expense (opening balance) $35, 000
Adjustment $ 700
Closing balance $35, 700
Supplies (unadjusted) $4, 000
Adjustment ($ 800)
Closing balance $3, 200
Demon Deacon Corporation
Adjusted Trial Balance
31 December, 2018
Accounts Debit ($) Credit ($)
Cash 10, 000
Accounts receivables 15, 000
Prepaid rent 4, 800
Supplies 800
Deferred revenue 2, 250
Common Stock 11, 000
Retained earnings 6, 000
Salaries payable 700
Service revenue 5, 950
Supplies expense 3, 200
rent expense 2, 400
Salaries expense 35, 700
71, 900 71, 900