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CH3 Assign3

This document contains journal entries for adjusting entries at the end of the fiscal year for various accounts including supplies inventory, interest receivable, rent revenue, insurance expense, salaries payable, allowance for doubtful accounts, unearned rent, and accumulated depreciation. It provides the beginning and ending balances for each account along with transactions during the year and asks to prepare the missing adjusting entry to reconcile the accounts.

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Rosa Julia Lawrence
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83 views2 pages

CH3 Assign3

This document contains journal entries for adjusting entries at the end of the fiscal year for various accounts including supplies inventory, interest receivable, rent revenue, insurance expense, salaries payable, allowance for doubtful accounts, unearned rent, and accumulated depreciation. It provides the beginning and ending balances for each account along with transactions during the year and asks to prepare the missing adjusting entry to reconcile the accounts.

Uploaded by

Rosa Julia Lawrence
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Lawrence 1

Complete your answers in a Word (or equivalent) document and submit here by no later
than February 13th at midnight. All answers are in journal entry format.

Problem 1:
Present, in general journal form, the adjustments that would be made on December 31, 2019, the
end of the fiscal year, for each of the following:
1) The supplies inventory on January 1, 2019 was $7,350. Supplies costing $16,150 were
acquired during the year and charged to the supplies inventory. An inventory taken on December
31, 2019 indicated supplies on hand of $8,810.
2) On April 30, 2019, a ten-month note receivable for $30,000 earning interest at 10% was
received from a customer.
3) On March 1, 2019, $9,000 was collected as rent from a tenant for one year and the rent
revenue account was credited at that time.
4) A two-year insurance policy costing $6,000 was purchased on April 1, 2019
5) A weekly payroll of $35,600, covering a five-day, Monday through Friday workweek, is paid
every Friday. This year, December 31st falls on a Thursday.

Account Debit $ Credit $


Dec. 31 Supplies Expense 14,690
Supplies 14,690
Dec. 31 Interest Receivable 2,000
Interest Revenue 2,000
Dec. 31 Rent Revenue 1,500
Unearned Rent Revenue 1,500
Dec. 31 Insurance Expense 2,250
Prepaid Insurance 2,250
Dec. 31 Salaries and Wages Expense 28,480
Salaries and Wages Payable 28,480
Lawrence 2

Problem 2:
This company’s fiscal year is the calendar year. For the following data, it is advisable to set up a
“T”-account for each item, with a beginning amount, an ending amount, and any “during the
year” activity that takes place…..then, determine the “missing” adjusting entry.

In other words, with this starting amount, this ending amount, and the stuff that happens in
between, what adjusting entry do I need to take me to the correct ending figure?

a) Allowance for Doubtful Accounts on January 1, 2019 was $50,000. The balance in the
allowance account on December 31, 2019, after making the annual adjustment was $50,000.
During the year just ended, bad debts written off amounted to $30,000. What is the missing
adjusting entry?

A) Allowance for Doubtful Account


Date Particulars Debit $ Date Particulars Credit $
1/1/19 Opening Balance 50,000 To Account Receivable 30,000

By Bad Debts written off 30,000 12/31/19 Closing Balance 50,000


80,000 80,000

b) Unearned Rent at January 1, 2019 was $5,300 and at December 31, 2012 was $6,000. The
records indicate cash receipts from rental sources during the year amounted to $40,000, all of
which was credited to the Unearned Rent account You are to prepare the missing adjusting entry.

B) Unearned Rent Accounts


Date Particulars Debit $ Date Particulars Credit $
1/1/19 Opening Balance 5,300 Rent Received 40,000

Cash 40,700 12/31/19 Closing Balance 6,000


46,000 46,000

c) Accumulated Depreciation-Equipment at January 1, 2019 was $230,000. At December 31,


2019 it was $280,000. During the year, one piece of equipment was sold. The equipment had an
original cost of $40,000 and was ¾ (75%) depreciated when sold. Prepare the missing adjusting
journal entry.

Accumulated Depreciation-Equipment
Date Particulars Debit $ Date Particulars Credit $
To Sales of Equipment 30,000 1/1/19 By Beginning Balance 230,000

12/31/19 To Ending Balance 280,000 12/31/19 By Depreciation Expense-Equip. 80,000


310,000 310,000

Adjusting Journal Entries


Date Accounts Debit $ Credit $
12/31/19 Depreciation Expense-Equip. 80,000
To Accumulated Depreciation-Equip. 80,000

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