PS Music UNADJUSTED TRIAL BALANCE July 31, 2016

UNADJUSTED TRIAL BALANCE

July 31, 2016

 

The unadjusted trial balance that you prepared for PS Music at the end of Chapter 2 should appear as follows:

PS Music

UNADJUSTED TRIAL BALANCE

July 31, 2016

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	9,945.00
2	Accounts Receivable	2,750.00
3	Supplies	1,020.00
4	Prepaid Insurance	2,700.00
5	Office Equipment	7,500.00
6	Accounts Payable		8,350.00
7	Unearned Revenue		7,200.00
8	Common Stock		9,000.00
9	Dividends	1,750.00
10	Fees Earned		16,200.00
11	Wages Expense	2,800.00
12	Office Rent Expense	2,550.00
13	Equipment Rent Expense	1,375.00
14	Utilities Expense	1,215.00
15	Music Expense	3,610.00
16	Advertising Expense	1,500.00
17	Supplies Expense	180.00
18	Miscellaneous Expense	1,855.00
19	Totals	40,750.00	40,750.00

The data needed to determine adjustments are as follows:

•	During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. Since the company only contracted for 80 hours per month, make an adjusting entry to accrue the additional 35 hours of service. NOTE: The unearned revenue account will not be affected in this adjustment. For information on the amount of the accrued revenue to be billed to KXMD, see the contract described in the July 3, 2016, transaction at the end of Chapter 2.*
•	Supplies on hand at July 31, $275.
•	The balance of the prepaid insurance account relates to the July 1, 2016, transaction at the end of Chapter 2.*
•	Depreciation of the office equipment is $50.
•	The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3, 2016, transaction at the end of Chapter 2.*
•	Accrued wages as of July 31, 2016, were $140.   *The chapter 2 list of transactions are included in a separate panel of this problem for your convenience.
1.	Prepare adjusting journal entries on page 3 of the journal. (Please note that pages 1 and 2 show the transactions that were recorded in Continuing Problem 2 from chapter 2.) Refer to the Chart of Accounts for exact wording of account titles. Note that Chart of Accounts has the following additional accounts: 18 Accumulated Depreciation-Office Equipment; 22 Wages Payable; 57 Insurance Expense; 58 Depreciation Expense.
2.	Post the adjusting entries, inserting balances in the accounts affected. Do not enter anything in the Item column. Indicate a zero balance by inserting a 0 (zero) in either of the Balance columns opposite the adjusting entry.
3.	Prepare an adjusted trial balance.

Chapter 2 transactions:

Jul.	1	Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Music’s checking account.
	1	Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750.
	1	Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
	2	Received $1,000 on account.
	3	On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.
	3	Paid $250 on account.
	4	Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)
	5	Purchased office equipment on account from Office Mart, $7,500.
	8	Paid for a newspaper advertisement, $200.
	11	Received $1,000 for serving as a disc jockey for a party.
	13	Paid $700 to a local audio electronics store for rental of digital recording equipment.
	14	Paid wages of $1,200 to receptionist and part-time assistant.
	16	Received $2,000 for serving as a disc jockey for a wedding reception.
	18	Purchased supplies on account, $850.
	21	Paid $620 to Upload Music for use of its current music demos in making various music sets.
	22	Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.
	23	Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2016.
	27	Paid electric bill, $915.
	28	Paid wages of $1,200 to receptionist and part-time assistant.
	29	Paid miscellaneous expenses, $540.
	30	Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2016.
	31	Received $3,000 for serving as a disc jockey for a party.
	31	Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.
	31	Paid dividends, $1,250.

X

Chart of Accounts

CHART OF ACCOUNTS
PS Music
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Insurance 17 Office Equipment 18 Accumulated Depreciation-Office Equipment   LIABILITIES   21 Accounts Payable   22 Wages Payable   23 Unearned Revenue       EQUITY 31 Common Stock 33 Dividends	REVENUE 41 Fees Earned   EXPENSES 50 Wages Expense 51 Office Rent Expense 52 Equipment Rent Expense 53 Utilities Expense 54 Music Expense 55 Advertising Expense 56 Supplies Expense 57 Insurance Expense 58 Depreciation Expense 59 Miscellaneous Expense

Journal:

1. Prepare adjusting journal entries. (Please note that pages 1 and 2 show the transactions that were recorded in Continuing Problem 2 from chapter 2.) Refer to the Chart of Accounts for exact wording of account titles. Note that Chart of Accounts has the following additional accounts: 18 Accumulated Depreciation-Office Equipment; 22 Wages Payable; 57 Insurance Expense; 58 Depreciation Expense.

Journal is set up with the following columns:

Date:                  Description:                  Post Ref:                Debit           Credit

I need page 3 set up only, (adjusting entries), as pages one and two are done.

3. Prepare an adjusted trial balance.

PS Music

ADJUSTED TRIAL BALANCE

July 31, 2016

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Insurance
5	Office Equipment
6	Accumulated Depreciation-Office Equipment
7	Accounts Payable
8	Wages Payable
9	Unearned Revenue
10	Common Stock
11	Dividends
12	Fees Earned
13	Wages Expense
14	Office Rent Expense
15	Equipment Rent Expense
16	Utilities Expense
17	Music Expense
18	Advertising Expense
19	Supplies Expense
20	Insurance Expense
21	Depreciation Expense
22	Miscellaneous Expense
23	Totals