Concept explainers
1.
Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.
Rule of Debit and Credit:
Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and
Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.
To record: The adjusting entries for the given transactions on March 31, 2016.
2.
To explain: The difference between the adjusting entries and correcting entries
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Accounting (Text Only)
- The trial balance of Wikki Cleaners at December 31, 2012, the end of the current fiscal year, is as follows: Information for the adjusting entries is as follows: a. Cleaning supplies on hand on December 31, 2012, 18,750. b. Insurance premiums expired during the year, 1,800. c. Depreciation on equipment during the year, 21,600. d. Wages accrued but not paid at December 31, 2012, 1,830. As the accountant for Wikki Cleaners, you have been asked to prepare financial statements for the year. A file called F1WORK has been provided to assist you in this assignment. As you review this file, it should be noted that columns H and I will automatically change when you enter values in columns E or G.arrow_forwardOn September 1, a company received an advance rental payment of $12,000, to cover six months rent on an office building. There was no beginning balance in the Unearned Rent account for the period. Based on the information provided, A. Make the December 31 adjusting journal entry to bring the balances to correct. B. Show the impact that these transactions had.arrow_forwardThe unadjusted trial balance of La Mesa Laundry at August 31, 2016, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: a. Wages accrued but not paid at August 31 are 2,200. b. Depreciation of equipment during the year is 8,150. c. Laundry supplies on hand at August 31 are 2,000. d. Insurance premiums expired during the year are 5,300. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as Aug. 31 Bal. In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, Insurance Expense, and Income Summary. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forward
- The trial balance of Wikki Cleaners at December 31, 2012, the end of the current fiscal year, is as follows: Information for the adjusting entries is as follows: a. Cleaning supplies on hand on December 31, 2012, 18,750. b. Insurance premiums expired during the year, 1,800. c. Depreciation on equipment during the year, 21,600. d. Wages accrued but not paid at December 31, 2012, 1,830. Suppose you discover that an assistant in your department had misunderstood your instructions and had provided you with the wrong information on two of the adjusting entries. Cleaning supplies consumed during the year should have been 18,750, and insurance premiums unexpired at year-end were 1,800. Make the corrections on your worksheet and save the corrected file as F1WORK4. Reprint the worksheet.arrow_forwardThe trial balance of Sports Connection at June 30, 2013, the end of the current fiscal year, is as follows: Adjustment information is as follows: a. Supplies on hand as of June 30, 2013, 450. b. Insurance premiums that expired during the year, 2,420. c. Depreciation on equipment during the year, 1,500. d. Included in the rent expense of 30,000 is 1,200 that is prepaid for July 2013. e. Salaries accrued but not paid at June 30, 2013, 1,440. f. Merchandise inventory on June 30, 2013, 68,864. Open the file P2WORK from the website for this book at cengagebrain.com. Enter the formulas in the appropriate cells on the worksheet. Then enter the adjusting amounts in columns E and G. Also, in column D or F, insert the letter corresponding to the adjusting entry (ae). (Note: Not all textbooks handle the change in inventory as an adjustment. Use the method for handling inventory that is prescribed in your textbook.) Column A is frozen on the screen to assist you in completing requirement 3.arrow_forwardThe trial balance of Sports Connection at June 30, 2013, the end of the current fiscal year, is as follows: Adjustment information is as follows: a. Supplies on hand as of June 30, 2013, 450. b. Insurance premiums that expired during the year, 2,420. c. Depreciation on equipment during the year, 1,500. d. Included in the rent expense of 30,000 is 1,200 that is prepaid for July 2013. e. Salaries accrued but not paid at June 30, 2013, 1,440. f. Merchandise inventory on June 30, 2013, 68,864. As the accountant for Sports Connection, you have been asked to prepare adjusting entries and financial statements to complete the accounting cycle for the year. A worksheet called P2WORK has been provided to assist you in this assignment. As you review this worksheet, it should be noted that columns H and I will automatically change when you enter values in columns E and G.arrow_forward
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