– Problem – Belanger & Associates, PC, is an engineering firm with offices in several cities in...

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Accounting

– Problem –
Belanger & Associates, PC, is an engineering firm withoffices in several cities in the Carolinas. Belanger’s fiscalyear-end is December 31, and it prepares financial statements justonce a year, at year-end. For bookkeeping purposes, the company hasadopted a policy to record payments and collections in advance intoasset and liability accounts, respectively. Belanger’sunadjustedtrial balance at December 31, 2018 is shown below. Allaccounts have normal-side balances.
AccountsPayable                                                                     $  602,715
AccountsReceivable                                                                     923,610
Accumulated Depreciation –Buildings                                           332,105
Accumulated Depreciation –Equipment                                         269,597
Allowance for DoubtfulAccounts                                                    11,832
AdvertisingExpense                                                                        46,739
Buildings                                                                                   1,382,015
Cash                                                                                              582,287
Common Stock ($1par)                                                                 196,750
Dividends                                                                                     152,500
Equipment                                                                                    793,926
InsuranceExpense                                                                          77,205
InterestExpense                                                                              16,931
Land                                                                                             253,760
NotesPayable                                                                               821,000
PrepaidInsurance                                                                         385,104
Property TaxExpense                                                                     41,490
RetainedEarnings                                                                      1,037,500
Salaries and WagesExpense                                                      3,938,920
ServiceRevenue                                                                         5,612,810
Unearned RentRevenue                                                                  17,388
UtilitiesExpense                                                                           307,210
Additional information available at year-end is as follows:
Belanger sometimes leases unused space in its buildings to otherbusinesses. On September 1, 2018, a new tenant signed a 3-yearlease and paid the first 9 months’ rent of $17,388 in advance. Thelease began on that date and runs through August 31, 2021.
The Notes Payable balance relates to a bank loan obtained in2017 that is payable in full on March 31, 2023. The loan agreementspecifies that Belanger pay interest annually on March 31 at therate of 6.40%. Belanger’s bookkeeper made the proper entry for thefirst interest payment, on March 31, 2018. (Hint– Think about theentry Belanger made on the first interest payment date.)
On November 20, 2018, Belanger paid $31,640 for internet ads torun evenly over an 8-month period, starting December 1, 2018. Note– Contrary to the company’s normal practice, Belanger’s bookkeeperrecorded the prepayment into the Advertising Expense account.Give the adjusting entry needed when a company uses the expenseapproach to record a payment in advance.
Belanger performed $182,976 of engineering services for severalclients in December 2018 that it has not yet billed, recorded orcollected.
In the first week of January 2019, Belanger received bills forDecember 2018 utilities totaling $22,651. The company paid all ofthese bills in late January 2019.
Belanger estimates that 8.19% of the 2018 year-end accountsreceivable balance will notbe collected.
Belanger purchased its buildings in 2007 and its equipment in2014. Belanger depreciates its fixed assets according to thestraight-line method. For the buildings, it uses estimates of 35years for the useful life and $275,000 for the salvage value. Forthe equipment, it uses estimates of 9 years for the useful life and$47,349 for the salvage value.
On June 1, 2018, Belanger purchased a 2-year insurance policyfor $385,104 and paid the full cost of the policy in advance. Thepolicy provides coverage through May 31, 2020.
Belanger operates 5 days a week, Mondays through Fridays.Employees are paid each Friday, for hours worked through theprevious Friday. On Friday, December 28, 2018, the last pay day in2018, Belanger paid its employees for hours worked during the weekof December 17-21. The employees then worked their regular schedulethrough the end of the year. Note that Tuesday, December 25 was apaid holiday for all employees. Belanger’s payroll averages $15,720per day.
The company’s income tax rate for the year is 30%. (Hint– Theincome tax rate is applied to the company’s income after allrevenues and expenses have been considered except for the incometax charge.)
– Instructions –
Complete the following four tasks relating to Belanger &Associates, PC’s accounting process at year-end 2018:
(a)        Prepare theadjusting journal entries needed at December 31, 2018.
(b)       Prepare anadjustedtrial balance as of December 31, 2018. List the accounts inan appropriate trial balance order.
(c)        Prepare theclosing journal entries needed at December 31, 2018. Belanger usesan Income Summary account.
(d)       Prepare apost-closingtrial balance as of December 31, 2018. List theaccounts in an appropriate trial balance order.

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Requirement 1 Date Account Title and Explanation Debit Credit Dec 31 Unearned Rent Revenue 17388 4 9 7728 Rent Revenue 7728 To record rent revenue earned Interest expense 821000 64 9 12 39408 Interest payable 39408 To record interest payable Prepaid Advertising 31640 7 8 27685 Advertising Expense 27685 To record Prepaid Advertising Accounts receivable 182976 Service revenue 182976 To record service revenue earned Utilities Expense 22651 Utilities payable 22651 To record utilities payable Bad Debt Expense 923610 819 11832 63812 Allowance for Doubtful Accounts 63812 To record allowance for doubtful accounts Depreciation expense See Answer

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– Problem –Belanger & Associates, PC, is an engineering firm withoffices in several cities in the Carolinas. Belanger’s fiscalyear-end is December 31, and it prepares financial statements justonce a year, at year-end. For bookkeeping purposes, the company hasadopted a policy to record payments and collections in advance intoasset and liability accounts, respectively. Belanger’sunadjustedtrial balance at December 31, 2018 is shown below. Allaccounts have normal-side balances.AccountsPayable $ 602,715AccountsReceivable 923,610Accumulated Depreciation –Buildings 332,105Accumulated Depreciation –Equipment 269,597Allowance for DoubtfulAccounts 11,832AdvertisingExpense 46,739Buildings 1,382,015Cash 582,287Common Stock ($1par) 196,750Dividends 152,500Equipment 793,926InsuranceExpense 77,205InterestExpense 16,931Land 253,760NotesPayable 821,000PrepaidInsurance 385,104Property TaxExpense 41,490RetainedEarnings 1,037,500Salaries and WagesExpense 3,938,920ServiceRevenue 5,612,810Unearned RentRevenue 17,388UtilitiesExpense 307,210Additional information available at year-end is as follows:Belanger sometimes leases unused space in its buildings to otherbusinesses. On September 1, 2018, a new tenant signed a 3-yearlease and paid the first 9 months’ rent of $17,388 in advance. Thelease began on that date and runs through August 31, 2021.The Notes Payable balance relates to a bank loan obtained in2017 that is payable in full on March 31, 2023. The loan agreementspecifies that Belanger pay interest annually on March 31 at therate of 6.40%. Belanger’s bookkeeper made the proper entry for thefirst interest payment, on March 31, 2018. (Hint– Think about theentry Belanger made on the first interest payment date.)On November 20, 2018, Belanger paid $31,640 for internet ads torun evenly over an 8-month period, starting December 1, 2018. Note– Contrary to the company’s normal practice, Belanger’s bookkeeperrecorded the prepayment into the Advertising Expense account.Give the adjusting entry needed when a company uses the expenseapproach to record a payment in advance.Belanger performed $182,976 of engineering services for severalclients in December 2018 that it has not yet billed, recorded orcollected.In the first week of January 2019, Belanger received bills forDecember 2018 utilities totaling $22,651. The company paid all ofthese bills in late January 2019.Belanger estimates that 8.19% of the 2018 year-end accountsreceivable balance will notbe collected.Belanger purchased its buildings in 2007 and its equipment in2014. Belanger depreciates its fixed assets according to thestraight-line method. For the buildings, it uses estimates of 35years for the useful life and $275,000 for the salvage value. Forthe equipment, it uses estimates of 9 years for the useful life and$47,349 for the salvage value.On June 1, 2018, Belanger purchased a 2-year insurance policyfor $385,104 and paid the full cost of the policy in advance. Thepolicy provides coverage through May 31, 2020.Belanger operates 5 days a week, Mondays through Fridays.Employees are paid each Friday, for hours worked through theprevious Friday. On Friday, December 28, 2018, the last pay day in2018, Belanger paid its employees for hours worked during the weekof December 17-21. The employees then worked their regular schedulethrough the end of the year. Note that Tuesday, December 25 was apaid holiday for all employees. Belanger’s payroll averages $15,720per day.The company’s income tax rate for the year is 30%. (Hint– Theincome tax rate is applied to the company’s income after allrevenues and expenses have been considered except for the incometax charge.)– Instructions –Complete the following four tasks relating to Belanger &Associates, PC’s accounting process at year-end 2018:(a) Prepare theadjusting journal entries needed at December 31, 2018.(b) Prepare anadjustedtrial balance as of December 31, 2018. List the accounts inan appropriate trial balance order.(c) Prepare theclosing journal entries needed at December 31, 2018. Belanger usesan Income Summary account.(d) Prepare apost-closingtrial balance as of December 31, 2018. List theaccounts in an appropriate trial balance order.