5 Star operates a Private house painting agency called 5 Star Painting. Some Clients pay in advance for services; others are billed after services have been performed. Adjusting Entries are performed on monthly basis. An Adjusted Trial Balance dated December 31, 2016 follows. (Keep in mind that adjusting entries have been made for the first 11 months of 2016, but not for December). 5 STAR PAINTING Unadjusted Trial Balance December 31,2016 Accounts Debit (Rs) Credit (Rs) Cash 40,585 Accounts Receivable 2,000 Office Supplies 205 Prepaid Rent 1,200 Unexpired Insurance 270 Office Equipment 54,000 Accumulated Depreciation: Office Equipment 35,250 Accounts Payable 1,400 Interest payable 360 Income taxes payable 1,750 Note payable 9,000 Unearned Retainer fees 3,500 Capital Stock 30,000 Retained Earnings 8,000 Dividends 1,000 Revenue: Client Fees Earned 60,000 Office Supplies Expense 605 Depreciation Expense: Office Equipment 8,250 Rent Expense 5,775 Insurance Expense 1,010 Salaries Expense 27,100 Interest Expense 360 Income Tax Expense 6,900 Total Rs 149,260 Rs 149,260 Additional Information: i. Accrued but uncollected/unrecorded, client fees earned at December 31, 2016 amount to  Rs. 1,500. ii. The record shows that Rs. 2,500 of Cash Receipts originally recorded as unearned retainer fees had been earned as of December 31. iii. Office Supplies on hand at December 31 amount to Rs.110. iv. The Company purchased all of its office equipment when it first began business. At that time, the equipment’s estimated useful life was six years (72 Months). v. On October 1, 2016, The Company renewed its rental agreement paying Rs 1,800 cash for six months rent in advance. vi. On March 1, 2016, the company paid Rs 1,080 cash to renew its 12 month Insurance policy. vii. Accrued but unrecorded salaries expense at December 31 amount to Rs. 1,900. 

Required: 

a) For each of the above transactions (i to vii), Prepare the necessary Adjusting Entries.

 b) Trading and Profit & Loss Account and Balance Sheet

Answer rating: 100% (QA)

Stillm ore Smart Brain Adjusting Journal Entries Debit Credit Date Accounting Title Explanation No i... View the full answer