Module 2 – Chapter 4: Exercise Solve the following Questions: 1. Kirk Enterprises offers rug cleaning services to business clients. Below are the adjustments data for the year ended July 31. Using this information along with the spreadsheet below, record the adjusting entries in proper general journal form. Adjustments: (a) The equipment is estimated to last for five years with no salvage value. The asset will be depreciated evenly over its useful life. Record one month’s depreciation. (b) Accrued wages, $2. (c) Unused supplies on hand, $8. (d) Of the unearned revenue, 75% has been earned. (e) Unexpired insurance remaining at the end of the month, $9. Cash Prepaid Insurance Fees Receivable Supplies Equipment Accumulated Depreciation Unearned Revenue Accounts Payable Wages Payable Ruben Ramon, Capital Ruben Ramon, Drawing Service Revenue Advertising Expense Wages Expense Insurance Expense Supplies Expense Depreciation Expense Kirk Enterprises End-of-Period Spreadsheet For the Year Ended July 31 Unadjusted Trial Balance Adjustments Dr. Cr. Dr. Cr. 36 12 56 12 60 12 Adjusted Trial Balance Dr. Cr. 20 32 84 4 80 28 20 228 228 Page 1 2. Indicate whether each of the following would be reported in the section of financial statements identified as (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense: (1) (2) (3) (4) (5) (6) (7) (8) (9) Truck Accumulated Depreciation Telephone Expense Fees Earned Wages Payable Prepaid Insurance Office Supplies Dining Expense Unearned Rent 3. The following are all the steps in the accounting cycle. List them in the order in which they should be done. – Closing entries are journalized and posted to the ledger. – An unadjusted trial balance is prepared. – An optional end-of-period spreadsheet (work sheet) is prepared. – A post-closing trial balance is prepared. – Adjusting entries are journalized and posted to the ledger. – Transactions are analyzed and recorded in the journal. – Adjustment data are assembled and analyzed. – Financial statements are prepared. – An adjusted trial balance is prepared. – Transactions are posted to the ledger. 4. 82. Identify which of the following accounts should be closed with a debit or a credit at the end of the fiscal year. If it is not closed, mark as n/a. 1. Utilities Payable 2. Utilities Expense 3. Supplies 4. Supplies Expense 5. Fees Earned 6. Unearned Fees 7. Accounts Receivable 8. Jason Hill, Drawing 9. Jason Hill, Capital 10. Accumulated Depreciation—Equipment 11. Depreciation Expense—Equipment 12. Equipment 13. Prepaid Insurance 14. Insurance Expense Page 2