TUTORIAL TEST 3

The unadjusted trial balance of Jonathan Tri Nguyen Hair Stylists on December 31 is shown
below:
Jonathan Tri Nguyen Hair Stylists
(Unadjusted) Trial Balance
December 31, 2021
Account Title Balance
Debit Credit
Cash $ 7,300
Accounts Receivable 16,400
Office Supplies 1,900
Equipment 13,600
Accumulated Depreciation-Equipment $ 1,700
Accounts Payable 2,500
Salary Payable 0
Interest Payable
Unearned Revenue 3,100
Jonathan, Capital 31,200
Jonathan, Withdrawals 8,000
Service Revenue 13,500
Salaries Expense 3,200
Supplies Expense 0
Depreciation Expense-Equipment 0
Advertising Expense 1,600
Interest Expense 0
Total $ 52,000 $ 52,000

Adjustment data at December 31 follow:

a. On December 15, Tri Nguyen contracted to perform services for a client receiving $3,100 in
advance. Tri Nguyen recorded this receipt of cash as Unearned Revenue. As of December 31, Tri
Nguyen has completed $2,500 of the services.
b. Price used $750 of office supplies during the month.
c. The equipment depreciates $500 per year.
d. On December 1, the company borrowed $30,000 from a local bank on a 15-year mortgage.
The annual interest rate is 10%.
e. Tri Nguyen received a bill for December’s online advertising, $470. Tri Nguyen will not pay
the bill until January (Use Accounts Payable)

f. Price pays its employees weekly 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, Tri Nguyen agreed to provide a four-month consulting service (beginning
October 1) for a customer for $2,400. Tri Nguyen has completed the consulting service 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. Prepare the necessary adjusting journal entries for items a through g and post them to the T-
accounts.
3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance.
4. Prepare the income statement, the statement of owner’s equity for the year ended December 31,
2021, and the financial position as of December 31 2021 of Jonathan Tri Nguyen Hair Stylists.