The unadjusted trial balance of Lexington Inn Company at December 31, 2014, and the data needed for the adjustments follow.

Adjustment data at December 31 follow:
a. As of December 31, Lexington had $ 700 of Prepaid Insurance remaining.
b. At the end of the month, Lexington had $ 600 of office supplies remaining.
c. Depreciation on the building is $ 1,600.
d. Lexington pays its employees weekly on Friday. Its employees earn $ 2,000 for a five-day workweek. December 31 falls on Wednesday this year.
e. On November 20, Lexington contracted to perform services for a client receiving $ 2,400 in advance. Lexington recorded this receipt of cash as Unearned Revenue. As of December 31, Lexington has $ 1,400 still unearned.

1. Journalize the adjusting entries on December 31.
2. Using the unadjusted trial balance, open the accounts (use a four-column ledger) with the unadjusted balances. Post the adjusting entries to the ledger ­accounts.
3. Prepare the adjusted trial balance.
4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly?Explain.

  • CreatedJanuary 16, 2015
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