Problem Management Group, Inc.

  

Problem
Management Group, Inc., adjusts and closes its books each month. The trial balance at March 31, 2011 before
adjustments is as follows:
Debit
Cash……………………………………
Accounts Receivable……………..
Supplies……………………………….
Prepaid Advertising……………….
Equipment…………………………..
Accumulated Depreciation:
Equipment
Unearned Consulting Fees…………
Capital Stock…………………..
Retained Earnings……………….
Consulting Fees Earned…………..
Salaries Expense………………..
Utilities Expense……………….
Rent Expense…………………… Credit 26,650
30,000
3,750
8,400
72,000 32,000
1,200
4,500
178,500
====== 25,000
19,500
20,000
26,500
87,500
_______
178,500
======= The following information relates to month-end adjustments:
a According to contracts, consulting fees received in advance that were earned in March total $13,000.
b On January 1, 2011, the company paid in advance for 6 months’ advertising in professional journals.
c At March 31, supplies on hand amount to $1,250.
d The equipment has an original estimated useful life of 6 years.
Required:
1. Prepare the required adjusting entries in journal form. 2. After the proper adjusting entry is made, what is the balance in the Unearned Consulting Fees account at March
31?