Use of Account Balances as a Basis for Adjustments Lewis and Associates has been in the termite inspection and treatment business for five years. The following is a list of accounts for Lewis on June 30, 2017. It reflects the recurring transactions for the month of June but does not reflect any month-end adjustments:
The following additional information is available: a. Lewis rents a warehouse with office space and prepays the annual rent of $4,800 on May 1 of each year. b. The asset account Equipment represents the cost of treatment equipment, which has an estimated useful life of ten years and an estimated salvage value of $200. c. Chemical inventory on hand equals $1,300. d. Wages and salaries owed but unpaid to employees at the end….