Problem 1:

The Green Thrum Lawn Care Company began operations on April 1, 2024. At the April 30, the
trial balance shows the following balances for selected accounts.

Prepaid insurance 3600

Equipment 28000
Notes payable 20000
Unearned service revenue 4200
Service revenue 1800
Analysis reveals the following additional data:

1. Prepaid insurance is the cost of a 2-year insurance policy, effective April 1.

2. Depreciation on the equipment is Tk. 500 per month.
3. The notes payable is dated April 1. It is a six month, 12% interest.
4. Seven customers paid for the company’s 6-month lawn service package of Tk. 600
beginning in April. The company performed services for these customers in April.
5. Lawn services performed for other customers but not recorded at April 30 totaled Tk.
1500.

Prepare the adjusting entries for the month of April. Show computations.

Problem 2:

Hong Corporation encounters the following situations:

1. Hong collects Tk. 1300 from a customer in 2023 for services to be performed in 2024.
2. Hong incurs utility expenses which is not yet paid in cash or recorded.
3. Hong’s employees works three days in 2023 but not will be paid in 2024.
4. Hong performs services for customers but has not yet received cash or recorded the
transaction.
5. Hong paid Tk.2400 rent on December 1 for the four months starting December 1.
6. Hong received cash for future services and recorded a liability until the service was
performed.
7. Hong performed consulting services for a client in December 2014. On December 31, it
had not billed the client for services provided of Tk. 1000.
8. Hong paid cash for an expense and recorded as asset until the item was used up.
9. Hong purchased supplies at Tk. 900 in 2023; at year end, Tk. 400 of supplies remains
unused.
10. Hong purchased equipment on January 1, 2023; the equipment will be used for five year.
11. Hong borrowed Tk. 10000 on October 1, 2023, signing an 8% one-year note payable.

Identify what types of adjusting entry (prepaid expense, unearned revenue, accrued expense
accrued revenue) is needed in each situation at December 31, 2023.
Problem 3:

Devin Wolf Company has the following balances in selected accounts on December 31, 2024.

Accounts receivable 0
Accumulated depreciation-Equipment 0
Equipment 7000
Interest payable 0
Notes payable 10000
Prepaid insurance 2100
Salaries and wages payable 0
Supplies 2450
Unearned service revenue 30000
All the account has normal balances. The information below has been gathered at December 31,
2024.

1. Devin Wolf Company borrowed $10000 by signing a 9% one year note on September 1,
2023.
2. A count of supplies on December 31, 2023, indicates that supplies of $900 are on hand.
3. Depreciation on equipment for 2024 is $1000.
4. Devin Wolf Company paid $2100 for 12 month of insurance coverage on June 1, 2024.
5. On December 1, 2024 Devin Wolf Company collected $32000 for consulting services to
be performed from December 1, 2024 to March 31, 2025.
6. Devin Wolf Company performed consulting services for a client in December 2024. The
client will be billed $4200.
7. Devin Wolf Company pays its employees total salaries of $9000 every Monday for the
preceding 5-days week (Monday to Friday). On Monday, December 29, employees were
paid for the week ending December 26. All employees worked the last 3 days of 2024.

Problem 4:

The ledger of Passehl rental agency on March 31 of the current year includes the selected
accounts, shows below, before adjusting entries have been prepare.

Prepaid insurance 3600

Supplies 2800
Equipment 25000
Accumulated depreciation-Equipment 8400
Notes parable 20000
Unearned rent revenue 10200
Rent revenue 60000
Interest expense 0
Salaries and wages expense 14000
An analysis of the accounts shows the following:
 1. The equipment depreciates $400 per month.
2. One-third of the unearned rent revenue was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $750. Insurance expires at the rate of $300 per month.

Prepare the adjusting entries at March 31, 2024 assuming that the adjusting entries are made
quarterly.

Problem 5:

The trial balance columns of the worksheet for Warren Roofing at March 31, 2024, are as
follows.

WARREN ROOFING
Worksheet
For the month ended March 31, 2024
Cash 4500
Account receivable 3200
Supplies 2000
Equipment 11000
Accumulated depreciation-Equipment 1250
Account payable 2500
Unearned service revenue 550
Owner’s capital 12900
Owner’s drawings 1100
Service revenue 6300
Salaries and wages 1300
Misc. expenses 400
23500 23500

Other data:

1. A physical count reveals that only $480 of roofing supplies on hand.

2. Depreciation for March is $250.
3. Unearned revenue amounted to $260 at March 31.
4. Accrued salaries are $700.

Instructions:

(a) Enter the trail balance on a worksheet and complete the worksheet.
(b) Prepare an income statement and owner’s equity statement.
(c) Journalize the adjusting entries.
Problem 6:

At the end of its first month of operations, Pampered Pet Service has the following unadjusted
trial balance.

PAMPERED PET SERVICE

August 31, 2024
Trial Balance
Cash 5400
Account Receivable 2800
Supplies 1300
Prepaid insurance 2400
Equipment 60000
Notes payable 40000
Accounts payable 2400
Owner’s capital 30000
Owner’s drawing 1000
Service revenue 4900
Salaries and wages expense 3200
Utilities expense 800
Advertising expense 400
77300 77300
Other data:

1. Insurance expire at the rate of $200 per month.

2. $1000 of supplies is on hand at August 31.
3. Monthly depreciation on equipment is $900.
4. Interest of $500 on the notes payable has accrued during August.

Instructions:

I. Prepare a worksheet.
II. Prepare a classified balance sheet assuming $ 35000 of the notes payable are long term.
III. Journalize the adjusting entries.
Problem 7:

The trail balance columns of the worksheet for Dixon Company at June 30, 2024, are as follows.

DIXON COMPANY
Trail balance
For the Month ended June 30, 2024
Account title Debit Credit
Cash 2320
Account receivable 2440
Supplies 1880
Account payable 1120
Unearned service revenue 240
Owner’s capital 3600
Service revenue 2400
Salaries and wages expense 560
Misc. expense 160
Other data:

1. A physical count reveals $500 of supplies on hand.

2. $100 of the unearned revenue is still unearned at the month end.
3. Accrued salaries are $210.

Instructions: Enter the trial balance on a worksheet.