Continuing Problem–Chapter 3The unadjusted trial balance for PS Music as of July 31, 20Y5 is provided in the next tab in the worksheet.
You can also refer to Continuing Problem–Chapter 2 for the numbers.
Based on those balances and the additional data below, complete the adjustments and the adjusted trail balance
columns in the worksheet. Record the adjusting journal entries in the general journal and post them to the general ledger.
You will need the following additional accounts:
Account #
18
22
57
58
Account Name
Accumulated Depreciation-Office Equipment
Wages Payable
Insurance Expense
Depreciation Expense
The data needed to determine adjustments are as follows:
July 31:
During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours.
The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a
monthly fee of $3,600, which PS Music has already received payment for. Any additional hours
beyond 80 will be billed to KXMD at $40 per hour.
July 31:
Supplies on hand at July 31, $275.
July 31:
The balance of the prepaid insurance account relates to the following July 1, 20Y5 transaction:
Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire.
The policy covers a one-year period.
July 31:
Depreciation of the office equipment is $50.
July 31:
The balance of the unearned revenue account relates to the contract between PS Music
and KXMD, described in the July 3, 20Y5 transaction, which included the following: “On behalf
of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for
the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours
per month for a monthly fee of $3,600.” In accordance with the contract, Peyton received $7,200
from KXMD as an advance payment for the first two months.
July 31:
Accrued wages as of July 31 were $140.
Post the adjusting entries to the general ledger. Extend the account balance to the appropriate balance column
after each posting. Be sure to save your work in the spreadsheet.
Compare the numbers in your worksheet’s adjusted trial balance to your general ledger to verify your debits
equal your credits.
PS Music
Worksheet
For the Month Ended July 31, 20Y5
ACCOUNT NAME
TRIAL BALANCE
DEBIT
CREDIT
1 11 Cash
9,945.00
2 12 Accounts Receivable
2,750.00
3 14 Supplies
1,020.00
4 15 Prepaid Insurance
2,700.00
5 17 Office Equipment
7,500.00
5 18 Accumulated Depreciation, Office Equipment
ADJUSTMENTS
DEBIT
CREDIT
–
6 21 Accounts Payable
8,350.00
7 22 Wages Payable
–
7 23 Unearned Revenue
7,200.00
8 31 Common Stock
9,000.00
9 33 Dividends
1,750.00
10 41 Fees Earned
16,200.00
11 50 Wages Expense
2,800.00
12 51 Office Rent Expense
2,550.00
13 52 Equipment Rent Expense
1,375.00
14 53 Utilities Expense
1,215.00
15 54 Music Expense
3,610.00
16 55 Advertising Expense
1,500.00
17 56 Supplies Expense
180.00
18 57 Insurance Expense
–
19 58 Depreciation Expense
–
20 59 Miscellaneous Expense
1,855.00
22
40,750.00
23
24
25
26
27
28
29
30
31
40,750.00
ADJUSTED TRIAL BALANCE
DEBIT
CREDIT
INCOME STATEMENT
DEBIT
CREDIT
BALANCE SHEET
DEBIT
CREDIT
GENERAL JOURNAL
DATE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
General Journal for adjustments
DESCRIPTION
Page:
POST.
REF.
DEBIT
5
CREDIT
GENERAL LEDGER
ACCOUNT:
Cash
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
1
1
1
1
3
3
4
8
11
13
14
16
21
22
23
27
28
29
30
31
31
31
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
GJ2
GJ2
GJ2
GJ2
GJ2
GJ2
GJ2
GJ2
GJ3
GJ3
GJ3
GJ3
GJ3
GJ3
GJ3
GJ4
GJ4
GJ4
GJ4
GJ4
GJ4
GJ4
5,000.00
1,750.00
2,700.00
1,000.00
7,200.00
250.00
900.00
200.00
1,000.00
700.00
1,200.00
2,000.00
620.00
800.00
750.00
915.00
1,200.00
540.00
500.00
3,000.00
1,400.00
1,250.00
Accounts Receivable
DEBIT
ITEM
1
2
23
30
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ2
GJ3
GJ4
1,000.00
1,750.00
1,000.00
Supplies
DEBIT
1
18
CREDIT
1,000.00
1,750.00
2,750.00
ACCOUNT NO:
ITEM
REF.
8aa9a20f433d61abef4ddedeeb3de730
GJ3
14
BALANCE
DEBIT
Balance
12
BALANCE
POST
DATE
20Y5
July
CREDIT
3,920.00
8,920.00
7,170.00
4,470.00
5,470.00
12,670.00
12,420.00
11,520.00
11,320.00
12,320.00
11,620.00
10,420.00
12,420.00
11,800.00
11,000.00
11,750.00
10,835.00
9,635.00
9,095.00
9,595.00
12,595.00
11,195.00
9,945.00
POST
DATE
20Y5
July
11
850.00
CREDIT
DEBIT
170.00
1,020.00
CREDIT
ACCOUNT:
Prepaid Insurance
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
ACCOUNT:
REF.
GJ2
BALANCE
DEBIT
CREDIT
2,700.00
DEBIT
Office Equipment
ITEM
5
ACCOUNT:
ACCOUNT NO:
REF.
GJ2
DEBIT
CREDIT
7,500.00
DEBIT
ACCOUNT:
REF.
ACCOUNT NO:
DEBIT
CREDIT
Accounts Payable
ACCOUNT:
ITEM
1
3
5
18
REF.
DEBIT
CREDIT
ACCOUNT NO:
21
BALANCE
DEBIT
CREDIT
DEBIT
GJ2
GJ2
GJ3
250.00
7,500.00
8,350.00
250.00
7,500.00
850.00
Wages Payable
ACCOUNT NO:
POST
DATE
ACCOUNT:
ITEM
REF.
DEBIT
CREDIT
Unearned Revenue
ITEM
8aa9a20f433d61abef4ddedeeb3de730
REF.
22
BALANCE
DEBIT
CREDIT
ACCOUNT NO:
23
POST
DATE
20Y5
CREDIT
Balance
18
BALANCE
POST
DATE
20Y5
July
CREDIT
7,500.00
POST
ITEM
17
BALANCE
Accumulated Depreciation, Office Equipment
DATE
CREDIT
2,700.00
POST
DATE
20Y5
July
15
BALANCE
DEBIT
CREDIT
DEBIT
CREDIT
July
3
ACCOUNT:
GJ2
7,200.00
Common Stcok
7,200.00
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
1
REF.
8aa9a20f433d61abef4ddedeeb3de730
BALANCE
DEBIT
CREDIT
Balance
GJ2
31
5,000.00
DEBIT
CREDIT
4,000.00
9,000.00
ACCOUNT:
Dividends
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
31
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
GJ4
DEBIT
1,250.00
Fees Earned
ITEM
1
11
16
23
30
31
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
DEBIT
GJ3
GJ3
GJ3
GJ4
GJ4
6,200.00
7,200.00
9,200.00
11,700.00
13,200.00
16,200.00
1,000.00
2,000.00
2,500.00
1,500.00
3,000.00
Wages Expense
ITEM
1
14
28
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ3
GJ4
DEBIT
1
1
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ2
DEBIT
1
13
1,750.00
ACCOUNT NO:
REF.
GJ3
52
BALANCE
DEBIT
Balance
8aa9a20f433d61abef4ddedeeb3de730
CREDIT
800.00
2,550.00
Equipment Rent Expense
ITEM
51
BALANCE
POST
DATE
20Y5
July
CREDIT
400.00
1,600.00
2,800.00
1,200.00
1,200.00
Office Rent Expense
ITEM
50
BALANCE
POST
DATE
20Y5
July
CREDIT
Balance
41
BALANCE
POST
DATE
20Y5
July
CREDIT
500.00
1,750.00
POST
DATE
20Y5
July
33
700.00
CREDIT
DEBIT
675.00
1,375.00
CREDIT
ACCOUNT:
Utilities Expense
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
27
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
GJ4
DEBIT
915.00
Music Expense
ITEM
1
21
31
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ3
GJ4
DEBIT
1
8
22
ACCOUNT:
620.00
1,400.00
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ2
GJ3
DEBIT
ACCOUNT:
1
ACCOUNT NO:
REF.
DEBIT
CREDIT
DEBIT
Insurance Expense
ACCOUNT:
ITEM
ACCOUNT NO:
REF.
DEBIT
CREDIT
Depreciation Expense, Office Equipment
ITEM
8aa9a20f433d61abef4ddedeeb3de730
REF.
57
BALANCE
DEBIT
CREDIT
ACCOUNT NO:
58
POST
DATE
CREDIT
180.00
POST
DATE
56
BALANCE
Balance
CREDIT
500.00
700.00
1,500.00
200.00
800.00
Supplies Expense
ITEM
55
BALANCE
POST
DATE
20Y5
July
CREDIT
1,590.00
2,210.00
3,610.00
Advertising Expense
ITEM
54
BALANCE
POST
DATE
20Y5
July
CREDIT
300.00
1,215.00
POST
DATE
20Y5
July
53
BALANCE
DEBIT
CREDIT
DEBIT
CREDIT
ACCOUNT:
Miscellaneous Expense
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
4
29
REF.
8aa9a20f433d61abef4ddedeeb3de730
BALANCE
DEBIT
Balance
GJ2
GJ4
59
900.00
540.00
CREDIT
DEBIT
415.00
1,315.00
1,855.00
CREDIT
Continuing Problem–Chapter 4
The adjusted trial balance for PS Music as of July 31, 20Y5 is provided in the next tab in the worksheet.
a. Complete the worksheet started in Chapter 3
b. Prepare an income statement for the two months ended July 31, 20Y5.
c. Prepare a statement of stockholders’ equity for the two months ended July 31, 20Y5.
(Note: Peyton Smith made investments in PS Music on June 1 and July 1, 20Y5.)
If an amount is zero, enter in a “0”. If a net loss is incurred or there is a decrease in owner’s equity,
enter that amount as a negative number using a minus sign.
d. Prepare a classified balance sheet as of July 31, 20Y5.
e. Journalize and post the closing entries.
f. Prepare a post-closing trial balance as of July 31, 20Y5.
PS Music
Worksheet
For the Two Months Ended July 31, 20Y5
ACCOUNT NAME
TRIAL BALANCE
DEBIT
CREDIT
ADJUSTMENTS
DEBIT
CREDIT
ADJUSTED TRIAL BALANCE
DEBIT
CREDIT
INCOME STATEMENT
DEBIT
CREDIT
BALANCE SHEET
DEBIT
CREDIT
1 11 Cash
9,945.00
2 12 Accounts Receivable
2,750.00
3 14 Supplies
1,020.00
745.00
275.00
275.00
4 15 Prepaid Insurance
2,700.00
225.00
2,475.00
2,475.00
5 17 Office Equipment
7,500.00
5 18 Accumulated Depreciation, Office Equipment
9,945.00
9,945.00
4,150.00
4,150.00
7,500.00
–
6 21 Accounts Payable
50.00
8,350.00
7 22 Wages Payable
–
7 23 Unearned Revenue
7,200.00
8 31 Common Stock
9 33 Dividends
1,400.00
140.00
3,600.00
9,000.00
2,800.00
12 51 Office Rent Expense
13 52 Equipment Rent Expense
8,350.00
140.00
140.00
3,600.00
3,600.00
9,000.00
1,750.00
16,200.00
11 50 Wages Expense
50.00
8,350.00
9,000.00
1,750.00
10 41 Fees Earned
7,500.00
50.00
5,000.00
21,200.00
21,000.00
2,940.00
2,940.00
2,550.00
2,550.00
2,550.00
1,375.00
1,375.00
1,375.00
14 53 Utilities Expense
1,215.00
1,215.00
1,215.00
15 54 Music Expense
3,610.00
3,610.00
3,610.00
16 55 Advertising Expense
1,500.00
1,500.00
1,500.00
17 56 Supplies Expense
180.00
745.00
925.00
925.00
18 57 Insurance Expense
–
225.00
225.00
225.00
19 58 Depreciation Expense
–
50.00
20 59 Miscellaneous Expense
1,855.00
22
40,750.00
23
24
25
26
27
28
29
30
31
140.00
1,750.00
40,750.00
6,160.00
6,160.00
50.00
50.00
1,855.00
1,855.00
42,340.00
42,340.00
16,245.00
4,955.00
PS Music
Income Statement
For the Two Months Ended July 31, 20Y5
Fees Earned
Expenses
Wages Expense
Office Rent Expense
Equipment Rent Expense
Utilities Expense
Music Expense
Advertising Expense
Supplies Expense
Insurance Expense
Depreciation Expense
Miscellaneous Expense
Total expenses
Net Income (Loss)
21,200
2,940
2,550
1,375
1,215
3,610
1,500
925
225
50
1,855
16,245
4,955
PS Music
Statement of Stockholders’ Equity
For the Two Months Ended July 31, 20Y5
Beginning balance June 1, 20Y5
Issuance of common stock
Add: Net income (or Less: Net loss)
Less: Dividends
Ending balance Jully 31, 20Y5
Common
Retained
Stock
Earnings
$ 9,000.00 $
–
$
9,000.00 $
Total
Stockholders’
Equity
$
9,000
4,955
4,955
(1,750)
1,750
3,205.00 $ 12,205.00
PS Music
Balance Sheet
July 31, 20Y5
Assets
Current Assets
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Total current assets
Property, Plant and Equipment
Office Equipment
Accumulated Depreciation, Office Equipment
Total Property, Plant and Equipment
Total Assets
$
$
9,945
4,150
275
2,475
$
16,845
$
7,540
24,295
$
12,090
7,500
(50)
Liabilities
Current liabilities
Accounts Payable
Wages Payable
Unearned Revenue
Total liabilities
$
8,350
140
3,600
Stockholders’ Equity
Common Stock
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
9,000
3,205
12,205
$
24,295
GENERAL JOURNAL
DATE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Closing General Journal
DESCRIPTION
Page:
POST.
REF.
DEBIT
6
CREDIT
GENERAL LEDGER
ACCOUNT:
Cash
ACCOUNT NO:
POST
DATE
20Y5
July
ACCOUNT:
ITEM
1
1
1
1
1
3
3
4
8
11
13
14
16
21
22
23
27
28
29
30
31
31
31
REF.
BALANCE
DEBIT
CREDIT
Balance
GJ2
GJ2
GJ2
GJ2
GJ2
GJ2
GJ2
GJ2
GJ3
GJ3
GJ3
GJ3
GJ3
GJ3
GJ3
GJ4
GJ4
GJ4
GJ4
GJ4
GJ4
GJ4
5,000.00
1,750.00
2,700.00
1,000.00
7,200.00
250.00
900.00
200.00
1,000.00
700.00
1,200.00
2,000.00
620.00
800.00
750.00
915.00
1,200.00
540.00
500.00
3,000.00
1,400.00
1,250.00
Accounts Receivable
DEBIT
ACCOUNT:
ITEM
ACCOUNT NO:
REF.
GJ2
GJ3
GJ4
GJ5
DEBIT
CREDIT
1,000.00
1,750.00
1,000.00
1,400.00
Supplies
DEBIT
CREDIT
1,000.00
1,750.00
2,750.00
4,150.00
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
Balance
18
31 Adjusting
2c2c9ddd336e67e9c40b66ac474d665a
REF.
14
BALANCE
DEBIT
CREDIT
GJ3
GJ5
12
BALANCE
1
Balance
2
23
30
31 Adjusting
CREDIT
3,920.00
8,920.00
7,170.00
4,470.00
5,470.00
12,670.00
12,420.00
11,520.00
11,320.00
12,320.00
11,620.00
10,420.00
12,420.00
11,800.00
11,000.00
11,750.00
10,835.00
9,635.00
9,095.00
9,595.00
12,595.00
11,195.00
9,945.00
POST
DATE
20Y5
July
11
850.00
745.00
DEBIT
170.00
1,020.00
275.00
CREDIT
ACCOUNT:
Prepaid Insurance
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
31
ACCOUNT:
REF.
GJ2
GJ5
Adjusting
BALANCE
DEBIT
CREDIT
2,700.00
225.00
Office Equipment
DEBIT
ITEM
5
ACCOUNT:
ACCOUNT NO:
REF.
GJ2
DEBIT
CREDIT
7,500.00
DEBIT
31
ACCOUNT:
Adjusting
REF.
ACCOUNT NO:
DEBIT
GJ%
CREDIT
DEBIT
1
3
5
18
ACCOUNT:
50.00
ACCOUNT NO:
REF.
DEBIT
CREDIT
DEBIT
GJ2
GJ2
GJ3
250.00
7,500.00
8,350.00
250.00
7,500.00
850.00
Wages Payable
ACCOUNT:
ITEM
31
ACCOUNT NO:
Adjusting
REF.
DEBIT
GJ5
CREDIT
DEBIT
2c2c9ddd336e67e9c40b66ac474d665a
CREDIT
140.00
Unearned Revenue
ITEM
140.00
ACCOUNT NO:
REF.
22
BALANCE
POST
DATE
20Y5
CREDIT
Balance
21
BALANCE
POST
DATE
20Y5
July
CREDIT
50.00
Accounts Payable
ITEM
18
BALANCE
POST
DATE
20Y5
July
CREDIT
7,500.00
Accumulated Depreciation, Office Equipment
ITEM
17
BALANCE
POST
DATE
20Y5
July
CREDIT
2,700.00
2,475.00
POST
DATE
20Y5
July
15
23
BALANCE
DEBIT
CREDIT
DEBIT
CREDIT
July
3
31
ACCOUNT:
GJ2
GJ5
Adjusting
7,200.00
7,200.00
3,600.00
3,600.00
Common Stcok
ACCOUNT NO:
POST
DATE
20Y5
July
ACCOUNT:
ITEM
1
1
REF.
BALANCE
DEBIT
CREDIT
DEBIT
GJ2
4,000.00
9,000.00
5,000.00
Retained Earnings
ACCOUNT NO:
POST
DATE
CREDIT
Balance
ITEM
2c2c9ddd336e67e9c40b66ac474d665a
REF.
31
32
BALANCE
DEBIT
CREDIT
DEBIT
CREDIT
ACCOUNT:
Dividends
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
31
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
GJ4
DEBIT
1,750.00
Fees Earned
ITEM
1
11
16
23
30
31
31
31
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
DEBIT
GJ3
GJ3
GJ3
GJ4
GJ4
GJ5
GJ5
Adjusting
Adjusting
6,200.00
7,200.00
9,200.00
11,700.00
13,200.00
16,200.00
17,600.00
21,200.00
1,000.00
2,000.00
2,500.00
1,500.00
3,000.00
1,400.00
3,600.00
Wages Expense
ITEM
1
14
28
31
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ3
GJ4
GJ5
Adjusting
DEBIT
ACCOUNT:
1
1
1,200.00
1,200.00
140.00
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ2
DEBIT
2c2c9ddd336e67e9c40b66ac474d665a
CREDIT
800.00
2,550.00
1,750.00
Equipment Rent Expense
ITEM
ACCOUNT NO:
REF.
51
BALANCE
POST
DATE
20Y5
CREDIT
400.00
1,600.00
2,800.00
2,940.00
Office Rent Expense
ITEM
50
BALANCE
POST
DATE
20Y5
July
CREDIT
Balance
41
BALANCE
POST
DATE
20Y5
July
CREDIT
500.00
1,750.00
POST
DATE
20Y5
July
33
52
BALANCE
DEBIT
CREDIT
DEBIT
CREDIT
July
1
13
Balance
2c2c9ddd336e67e9c40b66ac474d665a
GJ3
700.00
675.00
1,375.00
ACCOUNT:
Utilities Expense
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
27
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
GJ4
DEBIT
915.00
Music Expense
ITEM
1
21
31
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ3
GJ4
DEBIT
1
8
22
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
GJ2
GJ3
DEBIT
1
31
ACCOUNT NO:
ACCOUNT:
REF.
GJ5
DEBIT
CREDIT
DEBIT
Insurance Expense
ACCOUNT:
ITEM
31
Adjusting
ACCOUNT NO:
REF.
GJ5
Depreciation Expense, Office Equipment
POST
2c2c9ddd336e67e9c40b66ac474d665a
CREDIT
180.00
925.00
745.00
POST
DATE
20Y5
July
56
BALANCE
Balance
Adjusting
CREDIT
500.00
700.00
1,500.00
200.00
800.00
Supplies Expense
ITEM
55
BALANCE
POST
DATE
20Y5
July
CREDIT
1,590.00
2,210.00
3,610.00
620.00
1,400.00
Advertising Expense
ITEM
54
BALANCE
POST
DATE
20Y5
July
CREDIT
300.00
1,215.00
POST
DATE
20Y5
July
53
57
BALANCE
DEBIT
225.00
CREDIT
DEBIT
CREDIT
225.00
ACCOUNT NO:
BALANCE
58
DATE
20Y5
July
ITEM
31
ACCOUNT:
Adjusting
REF.
GJ5
DEBIT
CREDIT
50.00
DEBIT
50.00
Miscellaneous Expense
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
4
29
REF.
GJ2
GJ4
59
BALANCE
DEBIT
Balance
2c2c9ddd336e67e9c40b66ac474d665a
CREDIT
900.00
540.00
CREDIT
DEBIT
415.00
1,315.00
1,855.00
CREDIT
PS Music
Post-Closing Trial Balance
July 31, 20Y5
Account
Debit
Credit
11 Cash
12 Accounts Receivable
14 Supplies
15 Prepaid Insurance
17 Office Equipment
18 Accumulated Depreciation, Office Equipment
21 Accounts Payable
22 Wages Payable
23 Unearned Revenue
31 Common Stock
32 Retained Earnings
33 Dividends
41 Fees Earned
50 Wages Expense
51 Office Rent Expense
52 Equipment Rent Expense
53 Utilities Expense
54 Music Expense
55 Advertising Expense
56 Supplies Expense
57 Insurance Expense
58 Depreciation Expense
59 Miscellaneous Expense
–
Post Close Trial Balance
–
Continuing Problem–Chapter 2
The transactions completed by PS Music during June 20Y5 were described at the end of Chapter 1. The following transactions were completed during July,
the second month of the business’s operations:
July 1
July 1
July 1
July 2
July 3
July 3
July 4
July 5
July 8
July 11
July 13
July 14
July 16
July 18
July 21
July 22
July 23
July 27
July 28
July 29
July 30
July 31
July 31
July 31
Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Music’s checking account.
Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store.
Paid rent for July, $1,750.
Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
Received $1,000 on account.
On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months.
The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours
beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment
for the first two months.
Paid $250 on account.
Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)
Purchased office equipment on account from Office Mart, $7,500.
Paid for a newspaper advertisement, $200.
Received $1,000 for serving as a disc jockey for a party.
Paid $700 to a local audio electronics store for rental of digital recording equipment.
Paid wages of $1,200 to receptionist and part-time assistant.
Received $2,000 for serving as a disc jockey for a wedding reception.
Purchased supplies on account, $850.
Paid $620 to Upload Music for use of its current music demos in making various music sets.
Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.
Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y5.
Paid electric bill, $915.
Paid wages of $1,200 to receptionist and part-time assistant.
Paid miscellaneous expenses, $540.
Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y5.
Received $3,000 for serving as a disc jockey for a party.
Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.
Paid dividends, $1,250.
Required
1 Analyze and journalize each transaction in a two-column journal beginning on Page 2.
2 Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.
3 Prepare an unadjusted trial balance as of July 31, 20Y5.
Check Figure: Total of Debit column: $40,750
GENERAL JOURNAL
DATE
DESCRIPTION
Page:
POST.
REF.
DEBIT
2
CREDIT
1 20Y5
2 july
1 cash
3
11
Common Stock
4
5,000.00
31
5,000.00
July 1
Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Music’s checking account.
July 1
Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store.
P. Smith deposited cash in exchange for stock
Paid rent for July, $1,750.
5
6
1 Rent expense
51
7
cash
11
8
1,750.00
1,750.00
July 1
Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
July 2
Received $1,000 on account.
July 3
On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months.
paid rent for july
The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours
9
beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment
10
1 prepaid insuranse
15
11
cash
11
12
brought year liability policy
for the first two months.
2,700.00
13
14 july
2,700.00
2 Fees Earned
15
Received on account
41
1,000.00
11
1,000.00
16
17 july
3 Cash
18
Advanced Payment
7,200.00
19
7,200.00
20
21
22 july
3 Expense
23
250.00
Paid account
250.00
24
25 July
4
26
Miscellaneous Expense
900.00
paid attorney
900.00
27
28 july
5
29
Office Expense
Bought office space
7,500.00
30
31 july
Paid $250 on account.
July 4
Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)
July 5
Purchased office equipment on account from Office Mart, $7,500.
July 8
Paid for a newspaper advertisement, $200.
July 11
Received $1,000 for serving as a disc jockey for a party.
July 13
Paid $700 to a local audio electronics store for rental of digital recording equipment.
July 14
Paid wages of $1,200 to receptionist and part-time assistant.
July 16
Received $2,000 for serving as a disc jockey for a wedding reception.
July 18
Purchased supplies on account, $850.
July 21
Paid $620 to Upload Music for use of its current music demos in making various music sets.
July 22
Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.
July 23
Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y5.
July 27
Paid electric bill, $915.
July 28
Paid wages of $1,200 to receptionist and part-time assistant.
July 29
Paid miscellaneous expenses, $540.
July 30
Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y5.
July 31
Received $3,000 for serving as a disc jockey for a party.
July 31
Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.
July 31
Paid dividends, $1,250.
7,500.00
8
32
advertisement Expense
Paid 200 for a newspaper ad
Required
200.00
33
34 july
July 3
1 Analyze and journalize each transaction in a two-column journal beginning on Page 2.
200.00
11 Fees Earned
35
36
received for disc jokey for a party
2 Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.
1,000.00
1,000.00
3 Prepare an unadjusted trial balance as of July 31, 20Y5.
37
Check Figure: Total of Debit column: $40,750
General Journal
GENERAL JOURNAL
DATE
1 july
DESCRIPTION
Page:
POST.
REF.
DEBIT
Paid for local audio equitment rental
700.00
3
4 july
700.00
14
5
Paid the receptionist
16
fees earned
Recived Serving as a Disc Jockey for a Wedding Reception
purchased supplies
850.00
Uploading music sets
620.00
620.00
22
17
Advertising expense
paid for local radio station ads
800.00
18
800.00
23
Fees earned
20
served as disc jokey
2,500.00
21
2,500.00
27 utilities expense
23
paid electric bills
915.00
24
915.00
28
26
Wages expense
Paid the receptionist and part time assistant
1,200.00
27
28 july
1,200.00
29
29
miscellaneous expense
Paid miscellaneous expense
540.00
30
31 july
On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months.
beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment
for the first two months.
850.00
15
25 july
Received $1,000 on account.
July 3
The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours
21 Music expense
14
22 july
Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
July 2
18 Supplies Expense
12
19 july
July 1
2,000.00
11
16 july
Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store.
2,000.00
9
13 july
Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Music’s checking account.
July 1
Paid rent for July, $1,750.
1,200.00
1,200.00
8
10 july
July 1
Wages expense
6
7 july
CREDIT
13 Rent expense
2
July 3
Paid $250 on account.
July 4
Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)
July 5
Purchased office equipment on account from Office Mart, $7,500.
July 8
Paid for a newspaper advertisement, $200.
July 11
Received $1,000 for serving as a disc jockey for a party.
July 13
Paid $700 to a local audio electronics store for rental of digital recording equipment.
July 14
Paid wages of $1,200 to receptionist and part-time assistant.
July 16
Received $2,000 for serving as a disc jockey for a wedding reception.
July 18
Purchased supplies on account, $850.
July 21
Paid $620 to Upload Music for use of its current music demos in making various music sets.
July 22
Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.
July 23
Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y5.
July 27
Paid electric bill, $915.
July 28
Paid wages of $1,200 to receptionist and part-time assistant.
July 29
Paid miscellaneous expenses, $540.
July 30
Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y5.
July 31
Received $3,000 for serving as a disc jockey for a party.
July 31
Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.
July 31
Paid dividends, $1,250.
540.00
30 Fees earned
32
33
34
served as disc jokey at a charity ball
Required
1,500.00
1 Analyze and journalize each transaction in a two-column journal beginning on Page 2.
1,500.00
2 Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.
35
36
3 Prepare an unadjusted trial balance as of July 31, 20Y5.
37
Check Figure: Total of Debit column: $40,750
General Journal (2)
GENERAL JOURNAL
DATE
1 july
2
DESCRIPTION
Page:
POST.
REF.
DEBIT
CREDIT
31 fees earned
served as a disc jockey
3,000.00
3
3,000.00
4
5
31 Music expense
6
Paid royalties
1,400.00
7
1,400.00
8
9
10
31 Dividends
paid dividends
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
General Journal (3)
1,250.00
1,250.00
GENERAL LEDGER
ACCOUNT:
Cash
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
1
1
1
REF.
BALANCE
DEBIT
CREDIT
Balance
CJ2
CJ12
CJ2
CJ2
July
5,000.00
1,750.00
2,700.00
1,000.00
900.00
7,500.00
200.00
1,000.00
700.00
1,200.00
2,000.00
620.00
800.00
750.00
915.00
1,200.00
540.00
500.00
3,000.00
1,400.00
1,250.00
ACCOUNT:
Accounts Receivable
DEBIT
ITEM
1
23
30
ACCOUNT NO:
ACCOUNT:
REF.
DEBIT
CREDIT
DEBIT
Supplies
ACCOUNT NO:
ITEM
1
18
CREDIT
1,000.00
1,750.00
2,250.00
750.00
500.00
POST
DATE
20Y5
July
july
Balance
fd1a083cfc163d77ddd274aacf63399f
REF.
12
BALANCE
Balance
CREDIT
3,920.00
8,920.00
7,170.00
4,470.00
5,470.00
6,370.00
(1,130.00)
(200.00)
1,000.00
700.00
(1,200.00)
2,000.00
(620.00)
(800.00)
750.00
(915.00)
(1,200.00)
(540.00)
500.00
3,000.00
(1,400.00)
(1,250.00)
POST
DATE
20Y5
July
july
july
11
14
BALANCE
DEBIT
850.00
CREDIT
DEBIT
170.00
1,020.00
CREDIT
ACCOUNT:
Prepaid Insurance
ACCOUNT NO:
POST
DATE
20Y5
july
ITEM
1
ACCOUNT:
REF.
GJ12
BALANCE
DEBIT
CREDIT
2,700.00
DEBIT
ACCOUNT NO:
POST
ITEM
REF.
DEBIT
CREDIT
DEBIT
Accounts Payable
ITEM
1
ACCOUNT:
ACCOUNT NO:
REF.
BALANCE
DEBIT
CREDIT
DEBIT
ACCOUNT NO:
POST
ITEM
REF.
DEBIT
CREDIT
Common Stcok
ITEM
1
REF.
DEBIT
CREDIT
ACCOUNT NO:
31
GJ2
fd1a083cfc163d77ddd274aacf63399f
BALANCE
DEBIT
CREDIT
Balance
23
BALANCE
POST
DATE
20Y5
July
CREDIT
250.00
Unearned Revenue
ACCOUNT:
21
Balance
DATE
CREDIT
7,500.00
POST
DATE
20Y5
July
17
BALANCE
7,500.00
ACCOUNT:
CREDIT
2,700.00
Office Equipment
DATE
15
5,000.00
DEBIT
CREDIT
4,000.00
9,000.00
ACCOUNT:
Dividends
ACCOUNT NO:
POST
DATE
20Y5
July
july
ITEM
1
31
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
DEBIT
1,250.00
Fees Earned
ITEM
1
1
ACCOUNT:
ACCOUNT NO:
REF.
DEBIT
CREDIT
DEBIT
GJ
6,200.00
7,200.00
1,000.00
Wages Expense
ITEM
1
CREDIT
Balance
ACCOUNT NO:
REF.
DEBIT
CREDIT
DEBIT
CREDIT
400.00
1,200.00
ACCOUNT:
Office Rent Expense
1,200.00
ACCOUNT NO:
POST
DATE
20Y5
July
ITEM
1
REF.
GJ2
ACCOUNT:
DEBIT
CREDIT
DEBIT
1,750.00
Equipment Rent Expense
ITEM
1
13
Balance
fd1a083cfc163d77ddd274aacf63399f
CREDIT
800.00
2,550.00
ACCOUNT NO:
POST
DATE
20Y5
July
july
REF.
51
BALANCE
Balance
50
BALANCE
Balance
41
BALANCE
POST
DATE
20Y5
July
CREDIT
500.00
1,250.00
POST
DATE
20Y5
July
33
52
BALANCE
DEBIT
700.00
CREDIT
DEBIT
675.00
700.00
CREDIT
ACCOUNT:
Utilities Expense
ACCOUNT NO:
POST
DATE
20Y5
July
july
ITEM
1
27
ACCOUNT:
REF.
BALANCE
DEBIT
CREDIT
Balance
DEBIT
915.00
Music Expense
ITEM
1
31
ACCOUNT:
915.00
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
DEBIT
1,590.00
Advertising Expense
1
22
ACCOUNT:
1,400.00
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
DEBIT
ITEM
ACCOUNT:
500.00
800.00
ACCOUNT NO:
REF.
DEBIT
CREDIT
Balance
DEBIT
Miscellaneous Expense
1
29
Balance
fd1a083cfc163d77ddd274aacf63399f
CREDIT
180.00
850.00
850.00
ITEM
ACCOUNT NO:
REF.
56
BALANCE
POST
DATE
20Y5
July
july
CREDIT
800.00
Supplies Expense
1
18
55
BALANCE
POST
DATE
20Y5
July
july
CREDIT
1,400.00
ITEM
54
BALANCE
POST
DATE
20Y5
July
july
CREDIT
300.00
POST
DATE
20Y5
July
july
53
59
BALANCE
DEBIT
CREDIT
540.00
DEBIT
415.00
540.00
CREDIT
MS Music
Trial Balance
For the Month Ended July 31, 20Y5
Account
Cash
Debit
Credit
23,200
2925
Common Stock
5000
Prepaid Insurance
2,700
Accounts Recevable
2,250
Unearned Revenue
5,950
Accounts Payable
10,450
Office Equipment
7,500
Rent expense
1,750
Insurance expense
2,700
legal expense
900
equipment rental expense
700
wages expense
2,400
advertising expense
1,000
supplies
850
music expense
2,020
utilities expense
915
miscellaneous expense
540
service revenue
6,500
dividends
1,250
Total: 40,750
Trial Balance
Total: 40,750
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