Reference no: EM132478372

Ken Hensley Enterprise Inc is a small recording studio in st.Iouis.Rock bands use the studio to the-quality demo recordings distributed to talent agents.New clients are required to pay in advance for studio services. Bands with established credit are billed for studio services at the end of each month.Adjusting entries are performed on am monthly basis. An unadjusted trial balance dated December 31,2005, follows (Bear in mind that adjusting entries already have been made for the first eleven months of 2005, but not for December.

Ken Hensley Enterprises,Inc

Unadjusted trail balance

December 31.2005

Cash &                                                                 43,170

Account receivable                                                 81,400

Studio supplies                                                        7,600

Unexpired insurance                                                     500

Prepaid studio rent                                                     4,000

Recording equipment                                                  90,000

Accumulated depreciation: recording equipment %             52,500

Notes payable                                                            16,000

Interest payable                                                             840

Income Tax payable                                                        3,200

Unearned studio revenue                                                   9600

Capital stock                                                                 80,000

Retained earnings                                                            38000

Studio Revenue earned                                                   107,000

Salaries expenses                                                             18000

Supplies expense                                                               1200

Insurance expense                                                           2,680

Depreciation expense: recording equipment                          16,500

Studio rent expense                                                         21,000

Interest expense                                                              840

Utilities expense                                                          2,350

Income Taxes expense                                                  17,900

&307,149&307,140

other data:

Question 1) Record show that 3,400 in studio revenue had not yet been billed or recorded as of December 31

Question 2) Studio supplies on hand at December 31 amount to $3,900.

Question 3) On August 1, 2005 the studio purchased a nine month insurance policy for & 1,500, The entire premium as initially debited to unexpired insurance.

Question 4) The studio is located in a rented building. On November 30,2005 the studio paid $6,000 rent in advance for December and January. The entire amount was debited ti prepaid studio rent.

Question 5) The useful life of the studios recording equipment is estimated to be a five years or 60 months) the straight-line method of depreciation is used.

Question 6) On May 1, 2005, the studio borrowed $ 16,000 by signing a 12-month,6 percent note payable to first federal Bank of St.Louis. The entire $16,000 plus 12 months interest is due in full on April 30, 2006.

Question 7) Records show that $3,600 of cash receipts originally recorded as unearned studio Revenue had been earned as of December 31.

Question 8) Salaries earned by recording to technicians that remain unpaid at December 31 amount to 4540.

Question 9) The studios accountant estimated that income taxes expense for the entire year ended December 31, 2005, is $19,600, (Note that $17,900 of this amount has already been recorded.

you are required to prepare adjusting entries and work sheet.