 The following is the unadjusted trial balance

of Overnight Auto Service at December 31,

2006. The information for adjusting entries
are given, Prepare Work sheet for Overnight
Auto Service from the given information.
 OVERNIGHT AUTO SERVICE
Trial Balance
December 31, 2007

Description Debit Balance Credit Balance

$ $
Cash 29,550
Account Receivable 6,500
Shop Supplies 1,800
Unexpired insurance 3,000
Land 52,000
Building 36,000
Accumulated Depreciation; Building 1,800
Tools and Equipment 15,000
Accumulated Depreciation; Tools & Equipment 2,950
Notes Payable 40,000
Account Payable 2,690
Unearned Rent Revenue 6,000
Asad Capital 82,600
Asad Drawing 44,800
Repair Service Revenue 161,460
Advertising Expense 3,900
Wages Expense 56,800
Supplies Expense 6,900
Depreciation Expense; Building 1,650
Depreciation Expense ;tools & equipment 2, 200
Utilities Expense 19,400
Insurance Expense 15,000
Interest Expense 3,000

TOTAL $297,500 $297,500

 (a) The Supplies account has a debit of $1,800. A count of supplies at
the end of the period reveals that $1,200 is on hand.
 (b) The Unexpired Insurance account has a debit balance of
$3,000, which represents prepayment of insurance for 2 months.
 (c) Depreciation of the Building is $150 for December.
 (d) Depreciation of the tools and equipment is $250 for December.
 (e) The Unearned Rent Revenue account has a credit balance of
$6,000, which represents the receipt of three-months’ rent beginning
with December 1.
 (f) Wages accrued but not paid at the end of December total $1,950.
 (g) Interest accrued but not paid at the end of December total $300.
 (h) Repair service revenue accrued at the end of December, but not
recorded, total $750.
 Reed Geophysical Consulting adjust and
closes its account only at year end.
 The following is the unadjusted Trial Balance

of “Reed Geophysical Consulting” at

December 31, 2001.
 After that the information for the Adjusting

Entries are given, prepare Work Sheet with the

help of the given Trial Balance and
information for Adjusting Entries.
 REED GEOPHYSICAL CONSULTING
Trial Balance
December 31, 2001
Description Debit Balance Credit Balance
$ $
Cash 19,140
Consulting Fee Receivable 23,400
Unexpired office Rent 3,300
Unexpired Dues and Subscriptions 960
Supplies 1,300
Equipment 40,000
Accumulated Depreciation; Equipment 7,200
Notes Payable 5,000
Unearned Consulting Fees 35,650
Glen Reed, Capital 47,040
Glen Reed, Drawing 63,000
Consulting Fees Earned 90,860
Salaries Expense 16,900
Telephone Expense 2,550
Rent Expense 11,000
Miscellaneous Expense 4,200

TOTAL $185,750 $185,750

 (a) The Supplies account has a debit of $1,300. A count of supplies at
the end of the period reveals that $450 is on hand.
 (b) The Unexpired Dues and Subscriptions account has a debit
balance of $960,Dues and Subscription expired during the year in the
total amount of $710.
 (c) The Unexpired Office Rent account has a debit balance of
$3,300, which represents prepayment of Rent for 3 months. The
agreement start from December 1, 2001.
 (d) Depreciation of the equipment is $4,000 for year 2001.
 (e) The Unearned Consulting Fee account has a credit balance of
$35,650, during this year Consulting services valued at $32,550 was
rendered for the amount received in advance from the customer .
 (f) Salaries accrued but not paid at the end of December total $1,200.
 (g) Interest accrued but not paid at the end of December total $100.
 (h) Consulting Fee accrued at the end of December, but not recorded,
total $3,000..
 Among the ledger accounts used by Glenwood
Speedway are the following: Prepaid Rent, Rent
Expense, Unearned Admissions Revenue,
Admissions Revenue, Prepaid Printing, Printing
Expense, Concessions Receivable and
Concession Revenue.
 For each of the following items write first the

Journal entry (if one is needed) to record the

external transaction and second the adjusting
entry, if any, required on May 31, the end of the
fiscal year.
 a. On May 1, borrowed $300,000 cash from
National Bank by issuing 12% notes payable
due in 3 months.
 b. On May 1, paid Rent for six months

beginning May 1at $30,000 per month.

 c. On May 2, sold season tickets for a total of

$910,000 cash. The season includes 70

racing days: 20 in May,25 in June and 25 in
July.
 d. On May 4, an agreement was reached with
Snack Bars Incorporation allowing that
company to sell refreshments at the track in
return for 10% of the gross receipts from
refreshment sales.
 e. On May 6, schedules for the 20 racing days

in May and the first 10 racing days in June

were printed and paid for at a cost of
$12,000.
 f. On May 31, Snack Bars Inc., reported that
the gross receipts from refreshment sales in
May had been $165,000 and that the 10%
owed to Glenwood Speedway would be
remitted on June 10.
 GENERAL JOURNAL
Date Account Titles and Debit Credit
Explanation $ $
2007 Cash 300,000
May1 Notes Payable 300,000
Obtained a 3 months
loan from National
Bank at 12% interest
per year.
 GENERAL JOURNAL
Date Account Titles and Debit Credit
Explanation $ $
2007 Interest expense 3,000
May31 Interest payable 3,000
To recognize Interest
expense for May on N/P to
National Bank
($300,000*12%*1/12=3000)
 GENERAL JOURNAL
Date Account Titles and Debit Credit
Explanation $ $
2007 Prepaid Rent 180,000
May1 Cash 180,000
Paid rent for six
months at $30,000
per month
 GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
$ $
2007 Rent expense 30,000
May31 Prepaid Rent 30,000
To recognize Rent expense for
the month of May.;
 GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
$ $
2007 Cash 910,000
May1 Unearned Admission Revenue 910,000
Sold seasons tickets to the 70
day racing seasons.
 GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
$ $
2007 Unearned Admission Revenue 260,000
May31 Admission Revenue 260,000
To recognize Admission
Revenue from 20 racing days
in May.
($910,000*20/70=260,000)
d. May 4 no entry required
 GENERAL JOURNAL
Date Account Titles and Debit Credit
Explanation $ $
2007 Prepaid Printing 12,000
May6 Cash 12,000
Printed racing forms
for first 30 racing
days
 GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
$ $
2007 Printing expense 8,000
May31 Prepaid Printing 8,000
To recognize Printing expense
for 20 racing days in May.
 GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
$ $
2007 Concessions Receivable 16,500
May31 Concessions Revenue 16,500
Earned 10% of the refreshment
sales of $165,000 during may
 Assume that May 1payment of $180,000 rent
was properly recorded as prepaid rent, but
that the May 31, Adjusting entry was omitted.
 What is the effect, if any, of this omission on

Glenwood’s financial statements at May 31.

 Specifically consider the financial statement

elements revenue, expense, net income,

asset, liability and owner’s equity at May 31.
 Indicate whether each would be overstated,

understated or not affected by omission.

 Revenue: Not affected
 Expense: Understated (by May’s rent of

$30,000)
 Net Income: Overstated (because May rent

expense was not recognized).

 Assets: Overstated (Prepaid rent should be

reduced by portion expired in May).

 Liabilities: Not affected
 Owner’s Equity: Overstated (because Net

Income is overstated).
 Kent Cinema Adjust its accounts each months
and closes its accounts at the end of each
Quarter.
 At July 31, the Unadjusted trial balance and

other data for adjusting entries is given.

 Prepare Work sheet for the month of July,

2007, utilizing unadjusted trial balance and

adjusting data provided.
 KENT CINEMA
Trial Balance
July 31, 2007
Description Debit Balance Credit Balance
$ $

Cash 20,000
Unexpired Film Rental Expense 31,200
Land 80,000
Building 168,000
Accumulated Depreciation; Building 10,500
Projection Equipment 36,000
Accumulated Depreciation; Projection Equipment 3,000
Notes Payable 190,000
Account Payable 4,400
Unearned Admission Revenue 1,000
Li Trong, Capital 103,400
Li Trong, Drawing 3,500
Admission Revenue 36,900
Salaries Expense 8,700
Light and Power Expense 1,800

TOTAL $ 349,200 $ 349,200

 (a). Film Rental expense for the month is
$15,200. However, the film rental expense
for several months had been paid in advance.
 (b). The building is being depreciated over a

period of 20 years.
 (c). The projection equipment is being

depreciated over a period of 5 years.

 (d). Interest accrued but not paid at the end of July

total $1,650.
 (e) The Unearned Admission Revenue account has a
credit balance of $1,000, which represents the receipts
of two-months’ Admission revenue in advance.
 (f) Concessions Revenue accrued at the end of July,

but not recorded, total $2,250.

 (g). Salaries accrued but not paid at the end of July

total $1,500.