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Accounting Adjusting Entries, Posting, and Preparing an Adjusted Trial Balance for Masasi Company, Inc

A practical case study on adjusting entries and trial balance preparation.

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    Accounting Adjusting Entries, Posting, and Preparing an Adjusted Trial Balance for Masasi Company, Inc. Accounting Adjusting Entries, Posting and Preparing an Adjusted Trial Balance MASASI COMPANY, INC. Trial Balance June 30, 2008 Account Number Debit Credit 101 Cash $ 7,150 112 Accounts Receivable 6,000 126 Supplies 2,000 130 Prepaid Insurance 3,000 157 Office Equipment 15,000 201 Accounts Payable $ 4,500 209 Unearned Service Revenue 4,000 311 Common Stock 21,750 400 Service Revenue 7,900 726 Salaries Expense 4,000 729 Rent Expense 1,000 Total $38,150 Total $38,150 In addition to those accounts listed on the trial balance, the chart of accounts for Masasi Company,Inc. also contains the following accounts and account numbers:No. 158 Accumulated Depreciation — Office Equipment, No. 212 Salaries Payable,No. 244 Utilities Payable,No. 631 Supplies Expense,No. 711 Depreciation Expense,No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. Supplies on hand at June 30 are $600. 2. A utility bill for $150 has not been recorded and will not be paid until next month. 3. The insurance policy is for a year. 4. $2,500 of unearned service revenue has been earned at the end of the month. 5. Salaries of $2,000 are accrued at June 30. 6. The office equipment has a 5 - year life with no salvage value. It is being depreciated at $250 per month for 60 months. 7. Invoices representing $1,000 of services performed during the month have not been recorded as of June 30. Instructions (a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal. (b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. (c) Prepare an adjusted trial balance at June 30, 2008. Use the templates in Appendix D. Complete all three tabs. (a) J3 Date Account Titles and Explanation Ref. Debit Credit 2008 June 30 Supplies Expense ................................ ............... Supplies ................................ ................... ($2,000 – $600) 631 126 1,400 1,400 30 Utilities Expense ................................ ................ Utilities Payable ................................ ..... 732 244 150 150 30 Insurance Expense ................................ ............. Prepaid Insurance ................................ .. ($3,000 ÷ 12 months) 722 130 250 250 30 Unearned Ser vice Revenue ............................... Service Revenue ................................ ..... 209 400 2,500 2,500

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