The Following Unadjusted Account Balances and Adjustment Data Are for Global

question 52

Essay

The following unadjusted account balances and adjustment data are for Global Advertising as of December 31, 2019: $$\begin{array} { l r } \text { Cash } & \$ 14,000 \\\text { Prepaid insurance } & 3,000 \\\text { Office supplies } & 900 \\\text { Office equipment } & 15,500 \\\text { Accumulated amort.-office equipment } & 4,500 \\\text { Accounts payable } & 1,600 \\\text { Salary payable } & 0 \\\text { Unearned service revenue } & 5,500 \\\text { Bill Johnson, Capital } & 14,900 \\\text { Bill Johnson, Withdrawals } & 11,000 \\\text { Service revenue } & 29,700 \\\text { Salary expense } & 11,800 \\\text { Amort. expense-office equipment } & 0 \\\text { Supplies expense } & 0 \\\text { Insurance expense } & 0\end{array}$$ Adjustment data:
Office supplies on hand December 31, 2019, $500
Prepaid insurance expired during 2019, $275
Unearned service revenue, December 31, 2019, $1,500
Amortization on equipment for 2019, $2,800
Accrued salaries, $1,800
Fill in the trial balance, adjustments, and adjusted trial balance columns in the following table.

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Definitions:

Contribution Margin Format

A format of income statement that separates variable costs from fixed costs to calculate contribution margin, which helps in analyzing profitability.

Absorption Costing

A financial accounting approach that encompasses all expenses of manufacturing, like direct materials, direct labor, along with variable and fixed overhead costs, into the pricing of a product.

Product Cost

The total expense incurred to produce a product, including direct materials, direct labor, and overhead costs.

Incremental Loss

The additional loss incurred from producing one extra unit of a product or service beyond the break-even point.