Twilight Production Studio, Islamabad, Pakistan provides media and recording studio services. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2018, follows. (Bear in mind that adjusting entries already have been made for the first eleven months of 2018, but not for December.) Adjusting entries Data: 1. Records show that Rs.6000 of cash receipts originally recorded as Unearned Production Revenue had been earned as of December 31. 2. Salaries earned by media production employees that remain unpaid at December 31 amount to Rs.50,000. 3. On August 1, 2018, the production studio purchased a one-year insurance policy for Rs. 120,000. 4. Studio supplies on hand at December 31 amount to Rs. 20,000. 5. On May 1, 2018, the Production studio borrowed Rs.500,000 by signing a 12-month, 9 percent note payable to Bank Alfalah Ltd. The entire Rs. 500,000 plus 12 months’ interest is due in full on April 30, 2019. 6. The useful life of the production studio’s recording equipment is estimated to be five years (or 60 months). The straight-line method of depreciation is used. 7. The income taxes expense of Twilight Production Studio for the entire year ended December 31, 2018, is Rs.19600. (Note that $17,900 of this amount has already been recorded.) Twilight Production Studio UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 Unadjusted Trial Balance Adjusting Entries Adjusted Trial Balance S. No Particulars Dr Cr Dr Cr Dr Cr 01 Cash 50,000 02 Accounts receivable 80,000 03 Production Studio supplies 35000 04 Unexpired insurance 80,000 05 Prepaid rent 4000 06 Media and Recording equipments 90,000 07 Accumulated depreciation: Media & recording equipment 52500 08 Notes payable 149050 09 Interest payable 26250 10 Income tax payable 3200 11 Unearned Production revenue 8200 12 Capital stock 100,000 13 Retained Earnings 38000 14 Production revenue earned 107000 15 Salaries expense 20000 16 Production studio Supplies expense 1200 17 Insurance expense 40,000 18 Depreciation expense: Media & recording equipments 16500 19 Studio rent expense 21000 20 Interest expense 26250 21 Utilities expense 2350 22 Income taxes expense 17900 484200 484200 Required: Prepare the necessary Adjusting entries for each of the above transaction. Prepare Adjusted trial balance with the help of worksheet given above.

Twilight Production Studio, Islamabad, Pakistan provides media and recording studio services. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2018, follows. (Bear in mind that adjusting entries already have been made for the first eleven months of 2018, but not for December.) Adjusting entries Data: 1. Records show that Rs.6000 of cash receipts originally recorded as Unearned Production Revenue had been earned as of December 31. 2. Salaries earned by media production employees that remain unpaid at December 31 amount to Rs.50,000. 3. On August 1, 2018, the production studio purchased a one-year insurance policy for Rs. 120,000. 4. Studio supplies on hand at December 31 amount to Rs. 20,000. 5. On May 1, 2018, the Production studio borrowed Rs.500,000 by signing a 12-month, 9 percent note payable to Bank Alfalah Ltd. The entire Rs. 500,000 plus 12 months’ interest is due in full on April 30, 2019. 6. The useful life of the production studio’s recording equipment is estimated to be five years (or 60 months). The straight-line method of depreciation is used. 7. The income taxes expense of Twilight Production Studio for the entire year ended December 31, 2018, is Rs.19600. (Note that $17,900 of this amount has already been recorded.) Twilight Production Studio UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 Unadjusted Trial Balance Adjusting Entries Adjusted Trial Balance S. No Particulars Dr Cr Dr Cr Dr Cr 01 Cash 50,000 02 Accounts receivable 80,000 03 Production Studio supplies 35000 04 Unexpired insurance 80,000 05 Prepaid rent 4000 06 Media and Recording equipments 90,000 07 Accumulated depreciation: Media & recording equipment 52500 08 Notes payable 149050 09 Interest payable 26250 10 Income tax payable 3200 11 Unearned Production revenue 8200 12 Capital stock 100,000 13 Retained Earnings 38000 14 Production revenue earned 107000 15 Salaries expense 20000 16 Production studio Supplies expense 1200 17 Insurance expense 40,000 18 Depreciation expense: Media & recording equipments 16500 19 Studio rent expense 21000 20 Interest expense 26250 21 Utilities expense 2350 22 Income taxes expense 17900 484200 484200 Required: Prepare the necessary Adjusting entries for each of the above transaction. Prepare Adjusted trial balance with the help of worksheet given above.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter2: Service Company Worksheet (f1work)

Section: Chapter Questions

Problem 4R: The trial balance of Wikki Cleaners at December 31, 2012, the end of the current fiscal year, is as...

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Unadjusted Trial Balance	Adjusting Entries	Adjusted Trial Balance
S. No	Particulars	Dr	Cr	Dr	Cr	Dr	Cr
01	Cash	50,000
02	Accounts receivable	80,000
03	Production Studio supplies	35000
04	Unexpired insurance	80,000
05	Prepaid rent	4000
06	Media and Recording equipments	90,000
07	Accumulated depreciation: Media & recording equipment		52500
08	Notes payable		149050
09	Interest payable		26250
10	Income tax payable		3200
11	Unearned Production revenue		8200
12	Capital stock		100,000
13	Retained Earnings		38000
14	Production revenue earned		107000
15	Salaries expense	20000
16	Production studio Supplies expense	1200
17	Insurance expense	40,000
18	Depreciation expense: Media & recording equipments	16500
19	Studio rent expense	21000
20	Interest expense	26250
21	Utilities expense	2350
22	Income taxes expense	17900
		484200	484200