Journalizing and posting adjustments to the T-accounts and preparing an

P3-35A Journalizing and posting adjustments to the T-accounts and preparing an

adjusted trial balance

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

and the data needed for the adjustments follow.

Debit Credit

Cash $7800

Accounts Receivable 19800

Prepaid rent 2600

Office Supplies 1100

Equipment 19900

Accumulated Depreciation—Equipment 4100

Accounts Payable 3000

Salaries Payable

Unearned Revenue 2800

Common Stock 39600

Dividends 9300

Service Revenue 15400

Salaries Expense 3100

Rent Expense

Depreciation Expense—Equipment

Advertising Expense 1300

Supplies Expense

Total 64900 64900

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.

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?