The Unadjusted Trial Balance of James Business Consulting at December

question 105

Essay

The unadjusted trial balance of James Business Consulting at December 31,2018,and the data for the adjustments follow:
James Business Consulting
Unadjusted Trial Balance
December 31,2018
$\begin{array}{|l|r|r|} \hline&\text { Balance } & \text { Balance } \\\hline \text { Cash } &\$ 40,000 \\\hline \text { Accounts Receivable } & 12,000 \\\hline \text { Prepaid Insurance } & 3,000 \\\hline \text { Office Supplies } & 6,000\\\hline \text { Accounts Payable } & & \$ 5,000 \\\hline \text { Advertising Payable } & & 0 \\\hline \text { Tames, Capital } & & 37,000 \\\hline \text { James, Withdrawals } & 5,000 & \\\hline \text { Service Revenue } & & 44,000 \\\hline \text { Advertising Expense } & 500 & \\\hline \text { Insurance Expense } & 1,500\\\hline \text { Office Supplies Expense } & 0 \\\hline \text { Rent Expense } & 6,000 \\\hline & \\\text { Salaries Expense } & 12,000\\\hline\text { Total } & \$ 86,000 & \$ 86,000 \\\hline\end{array}$ Data for adjustments:
a.James prepaid 6 months of business insurance on September 30,2018,with coverage beginning on October 1.James treats deferred expenses initially as assets.
b.A physical count of office supplies was made on December 31,2018.This count showed a balance of $4,200 office supplies on hand.
c.On December 31,2018,James received a bill for the November and December advertising in a local newspaper,$800.This bill will be paid on its due date,which is 1/10/2019.
James is preparing financial statements for the quarter ending December 31,2018.
Requirements
1.Journalize the adjusting entries on December 31,2018.
2.Prepare the December 31,2018 adjusted trial balance.Use a proper heading.

---

Definitions:

Cash Planning

The process of forecasting, managing, and monitoring a company's cash inflows and outflows to ensure it has sufficient liquidity to meet its obligations.

Maturing Obligations

Financial commitments or debts that are due for payment or settlement.

Maturity Date

The specified date on which the principal amount of a bond, loan, or other financial instrument is due to be paid in full.

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.