# The unadjusted trial balance that you prepared for PS Music at the end of Chapter 2 should appear as follows: The data needed to determine adjustments are as follows: During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. For information on the amount of the accrued revenue to be billed to KXMD, see the contract described in the July 3 transaction at the end of Chapter 2. Supplies on hand at July 31, $275. The balance of the prepaid insurance account relates to the July 1 transaction in Chapter 2. Depreciation of the office equipment is$50. The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3 transaction in Chapter 2. Accrued wages as of July 31 were $140. Instructions 1. Prepare adjusting journal entries. You will need the following additional accounts: 18 Accumulated Depreciation- Office Equipment 22 Wages Payable 57 Insurance Expense 58 Depreciation Expense 2. Post the adjusting entries, inserting balances in the accounts affected. 3. Prepare an adjusted trial balance. BuyFindarrow_forward ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 #### Solutions Chapter Section BuyFindarrow_forward ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 Chapter 3, Problem 1COP Textbook Problem 1469 views ## The unadjusted trial balance that you prepared for PS Music at the end of Chapter 2 should appear as follows:The data needed to determine adjustments are as follows: During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. For information on the amount of the accrued revenue to be billed to KXMD, see the contract described in the July 3 transaction at the end of Chapter 2. Supplies on hand at July 31,$275. The balance of the prepaid insurance account relates to the July 1 transaction in Chapter 2. Depreciation of the office equipment is $50. The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3 transaction in Chapter 2. Accrued wages as of July 31 were$140. Instructions1.    Prepare adjusting journal entries. You will need the following additional accounts: 18 Accumulated Depreciation- Office Equipment 22 Wages Payable 57 Insurance Expense 58 Depreciation Expense 2.    Post the adjusting entries, inserting balances in the accounts affected.3.    Prepare an adjusted trial balance.

(1)

To determine

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  All adjusting entries affect at least one income statement account (revenue or expense), and one balance sheet account (asset or liability).

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Ø Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and owners’ equities.

Ø Credit, all increase in liabilities, revenues, and owners’ equities, all decrease in assets, expenses.

T-account:

T-account refers to an individual account, where the increases or decreases in the value of specific asset, liability, stockholder’s equity, revenue, and expenditure items are recorded.

This account is referred to as the T-account, because the alignment of the components of the account resembles the capital letter ‘T’.’ An account consists of the three main components which are as follows:

(a) The title of the account

(b) The left or debit side

(c) The right or credit side

Adjusted trial balance is a summary of all the ledger accounts, and it contains the balances of all the accounts after the adjustment entries are journalized, and posted.

To prepare: The adjusting entries in the books of Company PS at the end of the July 31, 2019.

### Explanation of Solution

Working notes:

1. Calculated the value of accrued fees during the July

Fees earned=(Total hours of music providedMusic billed during the month)×Rate per hour=(115 Hr.80Hr.)×$40=35 Hr.×$40=$1,400 (1) Hence, fees earned during the July are$1,400.

2. Calculate the value of supplies expense

Supplies expense=(The value of supplies at the beginning of the monthSupplies on the hand at the end of the month)=$1,020$275=$745 (2) Hence, supplies expense during the July is$745

(3)

To determine

To prepare: An adjusted trial balance of Company PS at July 31, 2019.

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