Misfire Company_adjusting entries and adjusted trialbalance

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Description

Misfire Company is a small editorial services
company owned and operated by Pedro Borman. On August 31, 2010, the end of the
current year, Misfire Company’s accounting clerk prepared the unadjusted trial
balance shown on the next page.
The data needed to determine year-end
adjustments are as follows:

Misfire
Company
Trial Balance
August 31, 2010
Debit Credit
Cash $7,500
Accoutns
receivable
$38,400
Prepaid
Insurance
$7,200
Supplies $1,980
Land $1,12,500
Building $2,00,250
Accumulated
Depreciation – Building
$1,37,550
Equipment $1,35,300
Accumulated
Depreciation – Equipment
$97,950
Accoutns
Payable
$12,150
Unearned rent $6,750
Pedro Borman –
Capital
$2,21,000
Pedro Borman –
Drawing
$15,000
Fees earned $3,24,600
Salaries and
wages Expense
$1,93,370
Utilities
Expense
$42,375
Adverting
Expense
$22,800
Repairs
Expense
$17,250
Miscellneous
Expense
$6,075
$8,00,000 $8,00,000

(a) Unexpired insurance at August 31, $1,800.
(b) Supplies on hand at August 31, $750.
(c) Depreciation of building for the year,
$2,000.
(d) Depreciation of equipment for the year,
$5,000.
(e) Rent unearned at August 31, $2,850.
(f) Accrued salaries and wages at August 31,
$2,800.
(g) Fees earned but unbilled on August 31,
$12,380.

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Instructions
1. Journalize the adjusting entries. Add
additional accounts as needed.
2. Determine the balances of the accounts
affected by the adjusting entries, and prepare an adjusted trialbalance.

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