Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 3, Problem 3.5EX
To determine
Adjusting entries are those entries which are made at the end of the accounting period, to record the revenues in the period of which they have been earned and to record the expenses in the period of which have been incurred, as well as to update all the balances of assets and liabilities accounts on the
Accounting rules for journal entries:
- To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
- To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.
To indicate: The item incorrectly stated because of the error on the balance sheet and income statement.
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Chapter 3 Solutions
Accounting (Text Only)
Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (a) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Does every adjusting entry affect net income for...Ch. 3 - Prob. 9DQCh. 3 - (a) Explain the purpose of the two accounts:...
Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Prob. 3.2BPECh. 3 - Prob. 3.3APECh. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Prob. 3.4APECh. 3 - Prob. 3.4BPECh. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for unearned revenue The balance in the...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for prepaid expense The supplies...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Prob. 3.8APECh. 3 - Prob. 3.8BPECh. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Prob. 3.10APECh. 3 - Prob. 3.10BPECh. 3 - Prob. 3.1EXCh. 3 - Prob. 3.2EXCh. 3 - Prob. 3.3EXCh. 3 - Prob. 3.4EXCh. 3 - Prob. 3.5EXCh. 3 - Prob. 3.6EXCh. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Prob. 3.8EXCh. 3 - Prob. 3.9EXCh. 3 - Prob. 3.10EXCh. 3 - Adjusting entries for unearned and accrued fees...Ch. 3 - Prob. 3.12EXCh. 3 - Prob. 3.13EXCh. 3 - Prob. 3.14EXCh. 3 - Prob. 3.15EXCh. 3 - Prob. 3.16EXCh. 3 - Prob. 3.17EXCh. 3 - Prob. 3.18EXCh. 3 - Determining fixed assets book value The balance in...Ch. 3 - Prob. 3.20EXCh. 3 - Prob. 3.21EXCh. 3 - Prob. 3.22EXCh. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjusting entries for depreciation; effect of...Ch. 3 - Prob. 3.26EXCh. 3 - Adjusting entries from trial balances The...Ch. 3 - Prob. 3.28EXCh. 3 - Prob. 3.29EXCh. 3 - Prob. 3.1APRCh. 3 - Prob. 3.2APRCh. 3 - Prob. 3.3APRCh. 3 - Adjusting entries Good Note Company specializes in...Ch. 3 - Prob. 3.5APRCh. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Prob. 3.1BPRCh. 3 - Prob. 3.2BPRCh. 3 - Prob. 3.3BPRCh. 3 - Prob. 3.4BPRCh. 3 - Prob. 3.5BPRCh. 3 - Prob. 3.6BPRCh. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Ethics and professional conduct in business Daryl...Ch. 3 - Accrued revenue The following is an excerpt from a...Ch. 3 - Prob. 3.3CP
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- What two accounts are affected by the needed adjusting entries? A. supplies actual counts are lower than account balance B. employee salaries are due but not paid at year end C. insurance premiums that were paid in advance have expiredarrow_forwardReconstruction of Adjusting Entries from Unadjusted and Adjusted Trial Balances Following are the unadjusted and adjusted trial balances for Power Corp. on May 31: Required Reconstruct the adjusting entries that were made on Powers books at the end of May. By how much would Powers net income for May have been overstated or understated (indicate which) if these adjusting entries had not been recorded?arrow_forwardAdjusting entries and errors At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney: In preparing the financial statements, adjustments for the following data were overlooked: Unbilled fees earned at August 31, 31,900. Depreciation of equipment for August, 7,500. Accrued wages at August 31, 5,200. Supplies used during August, 3,000. Instructions 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of net income for August and the total assets, liabilities, and stockholders equity at August 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The first adjustment is presented as an example.arrow_forward
- Effect of omitting adjustment Assume that the error in Exercise 3-15 was not corrected and that the $6750 of accrued salaries was included in the first salary payment in January 20Y7. Indicate which items will he erroneously stated LWC1LL%C of failure to correct the initial error on (a) the income statement for January 20Y7 and (h) the balance sheet as of January 31, 20Y7.arrow_forwardLedger accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Recessive Interiors at January 31, 20Y2, the end of the year, follows: The data needed to determine year-end adjustments are as follows: (a) Supplies on hand at January 31 are 2,850. (b) Insurance premiums expired during the year are 3,150. (c) Depreciation of equipment during the year is 5,250. (d) Depreciation of trucks during the year is 4,000. (e) Wages accrued but not paid at January 31 are 900. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors chart of accounts should be used: Wages Payable, 22; Depreciation Expense Equipment, 54; Supplies Expense, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended January 31, 20Y2, additional common stock of 7,500 was issued. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.arrow_forwardWORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO DETERMINE ADJUSTING ENTRIES The partial work sheet shown below is taken from the books of Stark Street Computers, a business owned by Logan Cowart, for the year ended December 31, 20--. REQUIRED 1. Determine the adjusting entries by analyzing the difference between the adjusted trial balance and the trial balance. 2. Journalize the adjusting entries in a general journal.arrow_forward
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