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1. Using the information in the Worksheet (1) tab, Aging Analysis (2) tab, and Adjustments (3) tab, prepare the adjusting journal entries for the period. Record the entries in the Adjusting Journal Entries (4) tab. (Use letters a-j instead of a date for the date column and round all numbers to the nearest dollar.) SHOW YOUR WORK FOR THE ADJUSTMENT IN THE CELL OR YOU WILL NOT RECEIVE CREDIT FOR THE ENTRY. Use formulas and link the values to the adjustment.

5 Account Title End of Period Worksheet For the Year Ended December 31, 2019 Unadjusted Trial Balance Adjustments DRL CRL DR CR 233,400 489,956 16,782 Adjusted Trial Balance DR CR | Income Statement Balance Sheet DRL CRL DR CR 154.689 361,866 13,284 25,000 46.777 413,678 34,555 51,709 32,000 7 Cash 8 Accounts Receivable 9 Allowance for Doubtful Accounts 10 Interest Receivable 11 Note Receivable 12 Merchandise Inventory 13 Prepaid Insurance 14 Prepaid Rent 15 Supplies 16 Equipment 17 Accumulated Depreciation - Equipment 18 Accounts Payable 19 Salaries & Wages Payable 20 Uneamed Revenue 21 Interest Payable 22 Utilities Payable 23 Note Payable (final payment due 2023) 24 Common Stock 25 Retained Earnings 26 Dividends 27 Sales 28 Consulting Revenue 29 Sales Retums and Allowances 30 Sales Discounts 31 Cost of Goods Sold 32 Salaries & Wages Expense 33 Depreciation Expense - Equipment 34 Bad Debt Expense 35 Insurance Expense 36 Rent Expense 37 Supplies Expense 38 Utilities Expense 39 Interest Revenue 40 Interest Expense 350,550 270.600 424,500 120,789 5,269,790 935,933 30,520 63,552 4,525,014 848.608 5 9,286 41 7,386.419 7,386,419 42 Net Income D 1 Prepare the Aging Schedule to determine the adjustment required for the allowance method for bad debt: 2 Balance December 31, 2019 Estimated % Uncollectible Estimated Amount Uncollectible Age of Accounts 4 Current 287,616 2% 5 130 days past due 125,705 5% 12% 6 3190 days past due 7 Over 90 days past due 8 Total Accounts Receivable 65,345 11,290 489,956 30% 9 B 2 Although entries have been recorded all year, adjusting entries have not been recorded since December 31, 2018 when the financial statements were last prepared. 3 Refer to the Worksheet (1) tab for unadjusted account balance information as of December 31, 2019. 4 Use the following information to help in preparing adjusting entries for Rochester Enterprise. a. On November 1, 2019, Rochester Enterprise had signed a 8% bank loan (refer to the worksheet) due in 4 years. This is the only outstanding note payable. b. Prepaid insurance represents a 6-month insurance policy purchased on October 1, 2019. c. On September 1, 2019, Rochester Enterprise paid $25,000 for a 5-month lease for office space. d. Unearned revenue represents a 12-month contract for consulting services that will be performed monthly. The payment from the customer was received on December 1, 2019. e. A physical count revealed that supplies on hand at the end of the month total $23,230. f. Equipment is depreciated on a straight-line basis; residual value is estimated to be $25,000 with an estimated service life of 7 years. The assets were held the entire year. g. On December 1, Rochester Enterprise accepted from Greene Supplies a 7-month note receivable at a 5.5% annual interest rate. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The aging schedule of accounts receivable must be completed to determine management's desired balance for 2019. i. Accrued wages totaling $52,789 were unpaid and unrecorded at December 31, 2019. Utility costs incurred but unrecorded for the month of December were estimated to be $6,941. General Journal 3 Date Account Titles Debit Credit 15 16 19 21 22 23 25 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Name Worksheet (1) Aging Analysis (2) Adjustments (3) Adjusting Journal Entries(4)

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