Brown Trout Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Brown Trout Outfitters Co.
Unadjusted Trial Balance
September 30, 2012
Debit Credit
Balances Balances
Cash $26,400
Accounts Receivable 87,600
Supplies 7,200
Equipment 162,000
Unearned Fees 12,200
Capital Stock 80,000
Retained Earnings 142,800
Dividends 10,000
Fees Earned 295,800
Wages Expense 152,800
Rent Expense 55,000
Utilities Expense 42,000
Miscellaneous Expense 7,000
TOTALS $550,000 $550,000
For preparing the adjusting entries, the following data were assembled:
a. Supplies on hand on September 30 were $1,850.
b. Fees earned but unbilled on September 30 were $6,500.
c. Depreciation of equipment was estimated to be $2,800 for the year.
d. Unpaid wages accrued on September 30 were $1,275.
e. The balance in unearned fees represented the September 1 receipt in advance for services to be provided. Only $3,000 of the services was provided between September 1 and September 30.
Required:
1. Journalize the adjusting entries necessary on September 30, 2012
2. Determine revenues, expenses, and net income of Brown Trout Outfitters Co. before the adjusting entries.
3. Determine the revenues, expense, and net income of Brown Trout Outfitters Co. after the adjusting entries.
4. Determine the effect on retained earnings of the adjusting entries.
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