Question: Recording Adjusting Entries and Preparing an Adjusted Trial Balance Mint Cleaning, owned by Kat , had the following unadjusted accounts at the end of its second year of operations ending December 31, 2010. To simplify this exercise, the amounts given are in thousands of dollars and have normal debit or credit balances.
Other data not yet recorded at December 31, 2010, follow:
a. One-fourth of the Prepaid Insurance expired during 2010.
b. Depreciation expense for 2010, $4.
c. Wages earned by employees but not yet paid in 2010, $7.
d. One-third of the Unearned Service Revenue was earned in 2010.
Required: 1. Create T-accounts based on the account titles and balances at December 31, 2010.
2. Using the steps outlined in the chapter, (1) identify the type of adjustment of a through d, (2) determine the amount, and (3) prepare the adjusting journal entries required at December 31, 2010.
3. Post the effects of the adjusting journal entries to the T-accounts and prepare an adjusted trial balance as of December 31, 2010.