Problem 4B: Adjusting Entries, Posting, and Trial Balance

Problem 4b: Adjusting Entries, Posting, and Trial Balance

1. KaanBurduroglu has been operating the BurdurogluDelivery Service for the past five years. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. Based on the unadjusted trial balance, determine the BurdurogluDelivery Service's net income (loss) for January.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / - $75
B) / - $325
C) / $8,875
D) / $3,500
E) / $175

2. Based on the unadjusted trial balance, determine BurdurogluDelivery Service's total assets on January 31.

3. Based on the unadjusted trial balance, determine BurdurogluDelivery Service's total liabilities on January 31.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / $12,700
B) / $6,575
C) / $2,300
D) / $950
E) / $1,350

4. Based on the unadjusted trial balance, determine BurdurogluDelivery Service's total stockholders' equity on January 31.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / $12,700
B) / $6,575
C) / $6,900
D) / $10,400
E) / $3,300

5. Burduroglu Delivery Service's unadjusted trial balance as of January 31 is shown below. By addition and subtraction, show the effects of the following information on Burduroglu Delivery Service's resources and sources of resources. An examination of the supplies revealed that only $225 of supplies were on hand on January 31. $125 of supplies had been used up in January.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
Resources / Sources of Borrowed Resources / Sources of Owner Invested Resources / Sources of Management Generated Resources
Assets / Liabilities / Stockholders’ Equity
A) / + $225 / + $225
B) / - $125 / - $125
C) / + $225 / + $225
D) / - $125 / - $125
E) / + $125 & - $125

6. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. By addition and subtraction, show the effects of the following information on BurdurogluDelivery Service's resources and sources of resources. $1,000 of insurance had not been used up by January 31. $325 of insurance had been used up in January. Be careful: this is the most difficult one!

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
Resources / Sources of Borrowed Resources / Sources of Owner Invested Resources / Sources of Management Generated Resources
Assets / Liabilities / Stockholders’ Equity
A) / + $325 / - $325
B) / + $1,000 / + $1,000
C) / + $1,000 & - $1,000
D) / - $325 / - $325
E) / - $1,000 / - $1,000

7. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. By addition and subtraction, show the effects of the following information on BurdurogluDelivery Service's resources and sources of resources. The prepaid rent represents $600BurdurogluDelivery Service paid to VallasTruck Rental to rent a deliverytruck for BurdurogluDelivery Service to use in providing services to Burduroglu's clients in January and $600 to rent it for February. $600 of the prepaid rent had been used up by the end of January.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
Resources / Sources of Borrowed Resources / Sources of Owner Invested Resources / Sources of Management Generated Resources
Assets / Liabilities / Stockholders’ Equity
A) / + $600 & - $600
B) / + $600 / + $600
C) / - $600 / - $600
D) / + $600 / + $600
E) / - $1,200 / - $1,200

8. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. By addition and subtraction, show the effects of the following information on BurdurogluDelivery Service's resources and sources of resources. Wages earned by employees but unpaid to them as of January 31 were $300. $2,475 of total wages had been earned by employees in January.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
Resources / Sources of Borrowed Resources / Sources of Owner Invested Resources / Sources of Management Generated Resources
Assets / Liabilities / Stockholders’ Equity
A) / - $300 / - $300
B) / - $2,475 / - $2,475
C) / + $300 / + $300
D) / + $300 / - $300
E) / + $2,475 / - $2,475

9. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. By addition and subtraction, show the effects of the following information on BurdurogluDelivery Service's resources and sources of resources. By January 31, $500 of services had been provided to clients who had paid $1,350 in advance (unearned fees). At the end of January, $850 of services were still owed to customers who had paid in advance.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
Resources / Sources of Borrowed Resources / Sources of Owner Invested Resources / Sources of Management Generated Resources
Assets / Liabilities / Stockholders’ Equity
A) / - $500 / + $500
B) / + $850 / - $850
C) / + $850 / + $850
D) / - $850 / - $850
E) / - $500 / - $500

10. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. By addition and subtraction, show the effects of the following information on BurdurogluDelivery Service's resources and sources of resources. Federal income taxes for January were estimated to be $135. Taxes will be paid in February.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
Resources / Sources of Borrowed Resources / Sources of Owner Invested Resources / Sources of Management Generated Resources
Assets / Liabilities / Stockholders’ Equity
A) / - $135 / - $135
B) / + $135 / + $135
C) / + $135 / - $135
D) / - $135 / + $135
E) / - $135 / - $135

11. Burduroglu Delivery Service's unadjusted trial balance as of January 31 is shown below. An examination of the supplies revealed that only $225 of supplies were on hand on January 31. $125 of supplies had been used up in January. Prepare the adjusting entry required to account for this information.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / Supplies / $350
Cash / $350
B) / Supplies Expense / $350
Supplies / $350
C) / Supplies / $350
Accounts Payable / $350
D) / Supplies / $125
Supplies Expense / $125
E) / Supplies Expense / $125
Supplies / $125

12. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. $1,000 of insurance had not been used up by January 31. $325 of insurance had been used up in January. Prepare the adjusting entry required to account for this information. Be careful: this is the most difficult one!

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / Prepaid Insurance / $1,000
Cash / $1,000
B) / Insurance Expense / $1,000
Prepaid Insurance / $1,000
C) / Prepaid Insurance / $1,000
Insurance Expense / $1,000
D) / Insurance Expense / $325
Prepaid Insurance / $325
E) / Prepaid Insurance / $325
Insurance Expense / $325

13. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. The prepaid rent represents $600 BurdurogluDelivery Service paid to VallasTruck Rental to rent a deliverytruck for BurdurogluDelivery Service to use in providing services to Burduroglu's clients in January and $600 to rent it for February. $600 of the prepaid rent had been used up by the end of January. Prepare the adjusting entry required to account for this information.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / Rent Expense / $1,200
Prepaid Rent / $1,200
B) / Rent Expense / $600
Cash / $600
C) / Prepaid Rent / $1,200
Rent Expense / $1,200
D) / Prepaid Rent / $600
Rent Expense / $600
E) / Rent Expense / $600
Prepaid Rent / $600

14. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. Wages earned by employees but unpaid to them as of January 31 were $300. $2,475 of total wages had been earned by employees in January. Prepare the adjusting entry required to account for this information.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / Wages Expense / $300
Cash / $300
B) / Wages Expense / $300
Wages Payable / $300
C) / Wages Expense / $2,475
Wages Payable / $2,475
D) / Wages Payable / $2,475
Wages Expense / $2,475
E) / Wages Payable / $300
Wages Expense / $300

15. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. By January 31, $500 of services had been provided to clients who had paid $1,350 in advance (unearned fees). At the end of January, $850 of services were still owed to customers who had paid in advance. Prepare the adjusting entry required to account for this information.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / Unearned Fees / $500
Fees Revenue / $500
B) / Fees Revenue / $850
Unearned Fees / $850
C) / Fees Revenue / $500
Unearned Fees / $500
D) / Unearned Fees / $850
Fees Revenue / $850
E) / Cash / $500
Fees Revenue / $500

16. BurdurogluDelivery Service's unadjusted trial balance as of January 31 is shown below. Federal income taxes for January were estimated to be $135. Taxes will be paid in February. Prepare the adjusting entry required to account for this information.

Burduroglu Delivery Service
Unadjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $350
Prepaid Insurance / $0
Prepaid Rent / $1,200
Accounts Payable / $950
Wages Payable / $0
Income Taxes Payable / $0
Unearned Fees / $1,350
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $3,500
Supplies Expense / $0
Insurance Expense / $1,325
Rent Expense / $0
Wages Expense / $2,175
Telephone Expense / $75
Income Taxes Expense / $0
Totals / $12,700 / $12,700
A) / Income Taxes Expense / $135
Cash / $135
B) / Income Taxes Payable / $135
Income Taxes Expense / $135
C) / Cash / $135
Income Taxes Expense / $135
D) / Income Taxes Expense / $135
Accounts Payable / $135
E) / Income Taxes Expense / $135
Income Taxes Payable / $135

17. The BurdurogluDelivery Service's January 31 adjusted trial balance is shown below. Based on the adjusted trial balance, determine the BurdurogluDelivery Service's net income (loss) for January.

Burduroglu Delivery Service
Adjusted Trial Balance
January 31
Account Name / Debits / Credits
Cash / $6,625
Accounts Receivable / $700
Supplies / $225
Prepaid Insurance / $1,000
Prepaid Rent / $600
Accounts Payable / $950
Wages Payable / $300
Income Taxes Payable / $135
Unearned Fees / $850
Common Stock / $3,300
Retained Earnings / $3,600
Dividends / $250
Fees Revenue / $4,000
Supplies Expense / $125
Insurance Expense / $325
Rent Expense / $600
Wages Expense / $2,475
Telephone Expense / $75
Income Taxes Expense / $135
Totals / $13,135 / $13,135
A) / $4,000
B) / $3,615
C) / $3,600
D) / $265
E) / $15

18. Based on the adjusted trial balance, determine BurdurogluDelivery Service's total assets on January 31.

19. Based on the adjusted trial balance, determine BurdurogluDelivery Service's total liabilities on January 31.

20. Based on the adjusted trial balance, determine BurdurogluDelivery Service's total stockholders’ equity on January 31.

21. Determine the dollar amount of the BurdurogluDelivery Service’s total resources on January 31.

22. Determine the dollar amount of January 31 resources that the BurdurogluDelivery Service obtained through borrowing.

23. Determine the dollar amount of January 31 resources that the BurdurogluDelivery Service obtained from owners.

24. Determine the net dollar amount of resources that the BurdurogluDelivery Service generated through management operations in January.

25. Determine the dollar amount of January 31 resources that the BurdurogluDelivery Service generated through management operations since the company was formed (not just in January) and kept in the company.