Journalizing and posting adjustments to the T-accounts and preparing anadjusted trial balanceThe

unadjusted trial balance of Aurora Air Purification System at December 31, 2016,

and the data needed for the adjustments follow.

Account Title

Prepaid Rent

Cash

Debit Credit

Accounts Receivable

Office Supplies

Equipment

Accumulated Depreciation—Equipment

Accounts Payable

Salaries Payable

Unearned Revenue

Common Stock

Dividends

Service Revenue

Salaries Expense

Rent Expense

Depreciation Expense—Equipment

Advertising Expense

Supplies Expense

Total

Balance

$ 7,800

$ 64,900 $ 64,900

19,900

39,600

2,800

15,400

19,800

2,600

1,100

$ 4,100

3,000

9,300

3,100

1,300

AURORA AIR PURIFICATION SYSTEM

Unadjusted Trial Balance

December 31, 2016

Adjustment data at December 31 follow:

a. On December 15, Aurora contracted to perform services for a client receiving

$2,800 in advance. Aurora recorded this receipt of cash as Unearned Revenue. As

of December 31, Aurora has completed $1,800 of the services.

b. Aurora prepaid two months of rent on December 1.

Learning Objectives 3, 4

3. Adjusted trial balance $69,750

total

CHAPTER 3

170 chapter 3

c. Aurora used $600 of office supplies.

d. Depreciation for the equipment is $700.

e. Aurora received a bill for December’s online advertising, $1,000. Aurora will not

pay the bill until January. (Use Accounts Payable.)

f. Aurora pays its employees on Monday for the previous week’s wages. Its employees

earn $1,500 for a five-day workweek. December 31 falls on Wednesday this year.

g. On October 1, Aurora agreed to provide a four-month air system check (beginning

October 1) for a customer for $3,000. Aurora has completed the system check every

month, but payment has not yet been received and no entries have been made.

Requirements

1. Journalize the adjusting entries on December 31.

2. Using the unadjusted trial balance, open the T-accounts with the unadjusted

balances. Post the adjusting entries to the T-accounts.

3. Prepare the adjusted trial balance.

4. How will Aurora Air Purification System use the adjusted trial balance?

 

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