Nathan Corporation's equipment had an original life of 140 months, and the straight-line depreciationmethod is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at theend of its useful life.As of the end of the month, Asher Corporation has provided services to customers for which the earningsprocess is complete. Formal billings are normally sent out on the first day of each month for the priormonth's work. January's unbilled work is $75,000.Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at$4,500.A review of supplies on hand at the end of the month revealed items costing $10,500.The $7,200 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.The unearned revenue was collected in December of 20X7. 60% of that amount was actually earned inJanuary, with the remainder to be earned in February.The loan accrues interest at 1% per month. No interest was paid in January. Nathan Goldstien's administrative assistant maintains a very simple computerized general ledger system.This system includes intuitive routines for recording receipts, payments, and sales on account. However,the system is not sufficiently robust to automate end-of-period adjustments. Below is the trial balance forthe month ending January 31, 20X8. This trial balance has not been adjusted for the various items that aredescribed on the following page. Review the trial balance and narratives, and prepare the necessary adjustingentries.NATHAN CORPORATIONTrial BalanceJanuary 31, 20X8DebitsCredits112,500 $Cash|Accounts ReceivablePrepaid InsuranceSuppliesEquipmentAccumulatedDepreciationAccounts PayableUnearned RevenueLoan Payable37,2307,20021,339105,00030,00022,70725,50045,00072,00046,371Capital StockRetained Earmings, Jan. 1RevenuesSalary ExpenseRent ExpenseOffice Expense131,98536,29439,0007,500Dividends7,500373,563373,563

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Description: Nathan Corporation's equipment had an original life of 140 months, and the straight-line depreciationmethod is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at theend of its useful life.As of the end of the

The adjustment entries are prepared to adjust the revenue and expenses of the current period.

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Nathan Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life. As of the end of the month, Asher Corporation has provided services to customers for which the earnings process is complete. Formal billings are normally sent out on the first day of cach month for the prior month's work. January's unbilled work is $75,000. Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $4,500. A review of supplies on hand at the end of the month revealed items costing $10,500. The $7,200 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30. The unearned revenue was collected in December of 20X7. 60% of that amount was actually earned in January, with the remainder to be earned in February. The loan accrues interest at 1% per month. No interest was paid in January.

Nathan Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life. As of the end of the month, Asher Corporation has provided services to customers for which the earnings process is complete. Formal billings are normally sent out on the first day of cach month for the prior month's work. January's unbilled work is $75,000. Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $4,500. A review of supplies on hand at the end of the month revealed items costing $10,500. The $7,200 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30. The unearned revenue was collected in December of 20X7. 60% of that amount was actually earned in January, with the remainder to be earned in February. The loan accrues interest at 1% per month. No interest was paid in January.

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter11: Accounting For Transactions Using A General Journal

Section: Chapter Questions

Problem 1AFE

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