Question: Customers still more operates a private investigating agency called still more investigations. Some customers pay in advance for services; others are billed after services have been performed. Advanced payments are credited to an account entitled unearned retainer fees. Adjusting entries are performed on a monthly basis, the unadjusted trial balance accounts as of Dec. 31, 2008 are provided to you in random order as follows:
[Considering that adjusting entries have been made for the 1st eleven months of 2008, but not for the month of December]
|
|
DR
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|
CR
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Cash
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$40,585
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|
|
|
|
|
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Office equipment
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54,000
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|
|
|
|
|
Accounts payable
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|
|
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1,400
|
|
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Unearned retainer fees
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|
|
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3,500
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|
|
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Accounts receivable
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|
2,000
|
|
|
|
|
|
Retained earnings
|
|
|
|
|
8,000
|
|
|
Office supplies
|
|
205
|
|
|
|
|
|
Prepaid rent
|
|
|
1,200
|
|
|
|
|
Accumulated depreciation office equipment
|
35,250
|
|
|
|
|
|
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Unexpired insurance
|
|
270
|
|
|
|
|
|
Dividends
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|
|
|
|
|
1,000
|
|
|
|
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Client fees earned
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|
|
|
|
|
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60,000
|
|
|
|
Interest payable
|
|
|
|
|
|
|
360
|
|
|
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Capital stock
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|
|
|
|
|
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30,000
|
|
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Depreciation expense-office equipment
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8,250
|
|
|
|
|
|
|
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Income tax payable
|
|
|
|
|
|
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1,750
|
|
|
|
Notes payable
|
|
|
|
|
|
|
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9,000
|
|
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Office supplies expense
|
|
605
|
|
|
|
|
|
|
|
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Rent expense
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|
|
|
|
5,775
|
|
|
|
|
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Insurance expense
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|
|
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1,010
|
|
|
|
|
|
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Salaries expense
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|
|
|
27,100
|
|
|
|
|
|
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Interest expense
|
|
|
|
360
|
|
|
|
|
|
|
Income tax expense
|
|
|
6,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
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Totals
|
|
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$149,260
|
|
$149,260
|
Other Information:
[A] Accrued but unrecorded client fees earned at Dec. 31 amounted to $1500
[B] records show that $2500 of cash receipts originally recorded as unearned retainer fees had been earned as of dec. 31
[C] office supplies on hand at Dec 31 amounts to $110
[D] the company purchased all of its office equipment when it first began business at that time the equipment estimated useful life was 6 years
[E] on oct. 1,2008 the company renewed its rental agreement paying $1,800 cash for 6 months rent in advance
[F] on march 1 of the current year the company paid $1080 cash to renew its 12 month insurance policy
[G] accrued but unrecorded salaries at Dec. 31 amount to $1900
[H] On June 1, 2008 the company borrowed money from the bank by signing a $9000, 8 percent, 12 month note payable. The entire note plus 12 months accrued interest is due on May 31 2009
[I] the company's CPA estimates that income taxes expense for the entire year is $7500