ARIMA KOUSEI REPAIR SHOP

Unadjusted Trial Balance

December 31, 202A

Account Debit Credit

Cash 9,000
Accounts Receivable 12,000
Repairs Supplies 15,000
Repairs Tools 12,000
Furniture and Fixtures 65,000
Service Equipment 200,00
0
Notes Payable 32,500
K, Arima, Capital 202,000
K, Arima, Drawing 7,500
Service Income 109,000
Advertising 2,500
Salaries and Wages 9,000
Utility Expense 1,500
Rent Expense 10,000
Total 343,50 343,500
0

On December 31, the end of the accounting period, the following data were taken:
1. An actual count of repair supplies showed a balance of P8,500.
2. Repair tools are depreciated at 10% per annum.
3. Furniture and Fixtures are estimated to have useful life of 5 years and while
the service equipment has useful life of 10 years, both assets were bought on
September 1 of the current year.
4. A 10% interest has accrued on the Note Payable.
5. Of the income received, P9,000 is applicable to the next accounting period.
6. Accrual of expenses: Utilities P2,500; Rent P5,000.
7. The balance of the Advertising expense represents the payment for five
months paid on September 1 of the current year.

Prepare Adjusting Entries for the Period ending December 31, 202A.

1. Repair Supplies Expense 6,500

Repair Supplies 6,500

Repair Supplies
15,000 6,500
 8,500

12,000X10%=1,200

2. Depreciation Expense – Repair Tools 1,200

Accumulated Depreciation 1,200

Furniture and Fixtures

Cost-Salvage Value X4/12

Useful Life

65,000-0 X 4/12
5

=4,333.33

3. Depreciation Expense – F&F 4,333.33

Accumulated Depreciation 4,333.33

Service Equipment

200,000-0 X 4/12
10
=6,666.67

3. Depreciation Expense – Service Equip. 6,666.67

Accumulated Depreciation 6,666.67

32,500X10%=3,250

4. Interest Expense 3,250

Accrued Interest Expense 3,250

5. Service income 9,000

Unearned Service Income 9,000

6. Utilities Expense 2,500

Rent Expense 5,000
Accrued Utilities Expense 2,500
Accrued Rent Expense 5,000

8. Prepaid Advertising 500

Advertising 500