Cesar Mahusay operates an accounting firm. Shown below are selected accounts that appear in the Preliminary Trial Balance as of Dec. 31, 2018, and require adjustment.   ACCOUNTS RECEIVABLE P 22,500 ALLOWANCE FOR DOUBTFUL ACCOUNTS   1,200 NOTES RECEIVABLE   20,000 OFFICE EQUIPMENT   92,000 ACCUMULATED DEPRECIATION   4,500 RENTAL INCOME   12,000 SERVICE INCOME      450,000 SUPPLIES EXPENSE          6,250 INSURANCE EXPENSE          7,200 SALARIES EXPENSE      120,000       The following adjustments are to be made: Unused office supplies at the end, P 320 One year insurance was paid on April 1 of the current year Office equipment has a useful life of 10 years with a salvage value of P 2,000. It was acquired in July 2018. Unearned rental income is 1/3 of the amount collected Service income not yet collected P 3,000 The 60 days 6% note was received on Dec.1 Estimated Bad Debts is 10 % of the Accounts Receivable Accrued salaries P 12,000. Instruction: Prepare the necessary adjusting entries to arrive at the adjusted balances for the accounts.

Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter3: The Adjusting Process
Section: Chapter Questions
Problem 5PB: Reece Financial Services Co., which specializes in appliance repair services, is owned and operated...
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Cesar Mahusay operates an accounting firm. Shown below are selected accounts that appear in the Preliminary Trial Balance as of Dec. 31, 2018, and require adjustment.

 

ACCOUNTS RECEIVABLE

P

22,500

ALLOWANCE FOR DOUBTFUL ACCOUNTS

 

1,200

NOTES RECEIVABLE

 

20,000

OFFICE EQUIPMENT

 

92,000

ACCUMULATED DEPRECIATION

 

4,500

RENTAL INCOME

 

12,000

SERVICE INCOME

 

   450,000

SUPPLIES EXPENSE

 

       6,250

INSURANCE EXPENSE

 

       7,200

SALARIES EXPENSE

 

   120,000

 

 

 

The following adjustments are to be made:

  1. Unused office supplies at the end, P 320
  2. One year insurance was paid on April 1 of the current year
  3. Office equipment has a useful life of 10 years with a salvage value of P 2,000. It was acquired in July 2018.
  4. Unearned rental income is 1/3 of the amount collected
  5. Service income not yet collected P 3,000
  6. The 60 days 6% note was received on Dec.1
  7. Estimated Bad Debts is 10 % of the Accounts Receivable
  8. Accrued salaries P 12,000.

Instruction:

Prepare the necessary adjusting entries to arrive at the adjusted balances for the accounts.

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