[ljomamma]

I am having trouble getting my adjusted trial balance to come out right. Can someone please tell me what I'm doing wrong?

The trial balance is as follows

Dr. Cash 140
Dr. Advertising Supplies 165
Dr. Baking Supplies 125
Dr. Prepaid Insurance 1,320
Dr. Baking Equipment 1,300
Cr. Unearned Revenue 25
Cr. Note Payable 2,000
Cr. Capital 900
Cr. Teaching Revenue 125

1. A count reveals that $75 of brochures and posters remain at the end of the month
2. A count reveals that $35 was used of baking supplies during current month
3. Estimated baking equipment will have a usefule life of 5 years (Assume we decide to record a full month's worth of depreciation) Round to the nearest dollar
4. The note payable has a 6% interest. We are to pay the loan plus interest in a 24 month period. (Assume that half a month of interest has accured)
5. Prepare an invoice for $250 for teaching services. It will be paid next month.
6. Receive cellphone bill for $45 that is used for the business. The bill is for services provided during this month but isn't due until next month

This is what I have come up with for the adjusted trial

Dr. Cash 140
Dr. Accounts Receivable 250
Dr. Advertising Supplies 75
Dr. Baking Supplies 90
Dr. Prepaid Insurance 1,320
Dr. Baking Equipment 1,300
Cr. Accumulated Dep. Baking Equip. 22
Cr. Accounts Payable 0
Cr. Interest Payable 5
Cr. Unearned Revenue 25
Cr. Note Payable 2,000
Cr. Capital 900
Cr. Teaching Revenue 125
Dr. Telephone Exp 45
Dr. Advertising Supplies Exp 0
Dr. Baking Supplies Exp 0
Dr. Depreciation Exp 0
Dr. Interest Exp 0

Totals Dr. 3,220 and Cr. 3,077

What am I doing wrong? Please help

[pready]

1. The adjusting entry will be for the difference of what your account says you have onhand and your actual amount onhand.
Debit Advertising Supplies Expense for the difference
Credit Advertising Supplies for the amount.

2. Same as number one.
Debit Baking Supplies Expense for the difference
Credit Baking Supplies for the difference

3. You need to compute Depreciation Expense. You need to know the Depreciation method and salvage value.
I will use the Straight Line method with no salvage value. $1,300 - 0 = $1,300 / 5 years = $260 per year. To figure out one month of depreciation take $260 / 12 Months = approx $22 for one month.

Once you know your depreciation method and salvage value you will be able to compute this. Note use an Accounting Textbook to compute the Depreciation Amount based on the method you are using.
Your adjusting entry will be:
Debit Depreciation Expense for the amount
Credit Accumulated Depreciation - Baking Equipment for the amount.

4. You need to compute the amount of interest owed. The formula is: Principal * Rate * Time = Interest. $2,000 * 6% * 1/12 / 2 = Half a months interest.
The adjusting entry will be:
Debit Interest Expense for the amount
Credit Interest Payable for the amount

5. Is this for services rendered or for an expense. If this is for services rendered, but not yet billed the adjusting entry will be:
Debit Accounts Receivable for the amount
Credit Teaching Revenue for the amount

6. The adjusting entry is:
Debit Telephone Expense for the amount
Credit Accounts Payable for the amount.

Next you need to get updated account Balances.

It is easier to do this on Excel. Have 2 columns for the trial balance, the next 2 columns for your adjusting entries, then 2 more columns for your adjusted trial balance.