Milbank Repairs & Service, an electronics repair store,prepared the following unadjusted trial balance at the end of itsfirst year of operations:
| Milbank Repairs & Service |
| Unadjusted Trial Balance |
| June 30, 2019 |
| Debit
Balances | Credit
Balances |
| Cash | 12,410 | | | |
| Accounts Receivable | 82,420 | | | |
| Supplies | 19,860 | | | |
| Equipment | 472,590 | | | |
| Accounts Payable | | | 19,360 | |
| Unearned Fees | | | 21,850 | |
| Nancy Townes, Capital | | | 342,000 | |
| Nancy Townes, Drawing | 16,380 | | | |
| Fees Earned | | | 496,510 | |
| Wages Expense | 115,190 | | | |
| Rent Expense | 87,880 | | | |
| Utilities Expense | 63,060 | | | |
| Miscellaneous Expense | 9,930 | | | |
| 879,720 | | 879,720 | |
For preparing the adjusting entries, the following data wereassembled:
Required:
- Fees earned but unbilled on June 30 were $8,980.
- Supplies on hand on June 30 were $7,330.
- Depreciation of equipment was estimated to be $12,410 for theyear.
- The balance in unearned fees represented the June 1 receipt inadvance for services to be provided. During June $17,260 of theservices was provided.
- Unpaid wages accrued on June 30 were $1,590.
1. Journalize the adjusting entries necessaryon June 30, 2019.
| a. | Accounts Receivable | | |
| Fees Earned | | |
| b. | Supplies Expense | | |
| Supplies | | |
| c. | | | |
| | | |
| d. | | | |
| | | |
| e. | | | |
| | | |
Feedback
1. Keep in mind that you will be making an adjusting entry foreach of these that affects at least one income statement account(revenue or expense) and one balance sheet account (asset orliability). As you go through each of these, consider both sides ofthe transaction that results in an adjusting entry and identifyrelated accounts. Remember, four different categories of adjustingentries include prepaid expenses (deferred expenses), unearnedrevenues (deferred revenues), accrued expenses (accruedliabilities), and accrued revenues (accrued assets) plus theadjustment for depreciation expense.
2. Determine the revenues, expenses, and netincome of Milbank Repairs & Service before the adjustingentries.
| Revenues | $ |
| Expenses | |
| Net income | $ |
3. Determine the revenues, expenses, and netincome of Milbank Repairs & Service after the adjustingentries.
| Revenues | $ |
| Expenses | |
| Net income | $ |
4. Determine the effect of the adjustingentries on Nancy Townes, Capital.
Nancy Townes, Capital decreases by $.
