menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Adjusting entries Good Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On June 30, 20Y6, the end of the current year, the accountant for Good Note prepared the following trial balances: Instructions Journalize the seven entries that adjusted the accounts at June 30. None of the accounts were affected by more than one adjusting entry.

BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 3, Problem 4PA
Textbook Problem
60 views

Adjusting entries

Good Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On June 30, 20Y6, the end of the current year, the accountant for Good Note prepared the following trial balances:

Chapter 3, Problem 4PA, Adjusting entries Good Note Company specializes in the repair of music equipment and is owned and

Instructions

Journalize the seven entries that adjusted the accounts at June 30. None of the accounts were affected by more than one adjusting entry.

To determine

Prepare the adjusting entries in the books of Company GN at the end of the year.

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  All adjusting entries affect at least one income statement account (revenue or expense), and one balance sheet account (asset or liability).

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

  • Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
  • Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

An adjusting entry for Supplies expenses:

DateAccount title and explanation

Post

Ref.

Debit ($)Credit ($)
20Y6Supplies expenses  ($11,250$2,400) 8,850 
June30        Supplies  8,850
 (To record the supplies expenses incurred at the end of the year)   

Table (1)

  • Supplies expense decreased the value of stockholders’ equity by $8,850; hence debit the supplies expenses for $8,850.
  • Supplies are an asset, and it decreased the value of asset by $8,850, hence credit the supplies for $8,850.

An adjusting entry for insurance expenses:

DateDescription

Post

Ref.

Debit ($)Credit ($)
20Y6Insurance expenses ($14,250$3,850) 10,400 
June30        Prepaid insurance  10,400
 (To record the insurance expenses incurred at the end of the year)   

Table (2)

  • Insurance expense decreased the value of stockholders’ equity by $10,400; hence debit the insurance expenses for $10,400.
  • Prepaid insurance is an asset, and it decreased the value of asset by $10,400, hence credit the prepaid insurance for $10,400.  

An adjusting entry for depreciation expenses-Equipment:

DateDescription

Post

Ref.

Debit ($)Credit ($)
20Y6Depreciation expenses –Equipment ($106,100$94,500) 11,600 
June30        Accumulated depreciation-Equipment  11,600
 (To record the depreciation expenses incurred at the end of the year)   

Table (3)

  • Depreciation expense decreased the value of stockholders’ equity by $11,600; hence debit the depreciation expenses for $11,600.
  • Accumulated depreciation is a contra-asset account, and it decreased the value of asset by $11,600, hence credit the accumulated depreciation for $11,600.  

An adjusting entry for depreciation expenses-Automobiles:

DateDescription

Post

Ref.

Debit ($)Credit ($)
20Y6Depreciation expenses –Automobiles ($62,050$54,750) 7,300 
June30        Accumulated depreciation-Automobiles  7,300
 (To record the depreciation expenses incurred at the end of the year)   

Table (4)

  • Depreciation expense decreased the value of stockholders’ equity by $7,300; hence debit the depreciation expenses for $7,300

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 3 Solutions

Financial And Managerial Accounting
Show all chapter solutions
add
Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for accrued expense Prospect Realty Co....Ch. 3 - Adjustment for unearned revenue On June 1, 20Y2,...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Effect of omitting adjustments For the year ending...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Vertical analysis Two income statements for Cornea...Ch. 3 - Classifying types of adjustments Classify the...Ch. 3 - Classifying adjusting entries The following...Ch. 3 - Adjusting entry for accrued fees At the end of the...Ch. 3 - Effect of omitting adjusting entry Paradise Realty...Ch. 3 - Adjusting entries for accrued salaries Paradise...Ch. 3 - Determining wages paid The wages payable and wages...Ch. 3 - Effect of omitting adjusting entry Accrued...Ch. 3 - Effect of omitting adjusting entry When preparing...Ch. 3 - Adjusting entries for unearned fees The balance in...Ch. 3 - Effect of omitting adjusting entry At the end of...Ch. 3 - Adjusting entry for supplies The balance in the...Ch. 3 - Determining supplies purchased The supplies and...Ch. 3 - Effect of omitting adjusting entry At March 31,...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for unearned and accrued fees...Ch. 3 - Adjusting entries for prepaid and accrued taxes...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Determining fixed assets book value The balance in...Ch. 3 - Book value of fixed assets In a recent balance...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements For a...Ch. 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 - Adjusting entries from trial balances The...Ch. 3 - Adjusting entries from trial balances The...Ch. 3 - Adjusting entries On March 31, the following data...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Trident Repairs Service, an...Ch. 3 - Adjusting entries Good Note Company specializes in...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Adjusting entries On May 31, the following data...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Crazy Mountain Outfitters Co.,...Ch. 3 - Adjusting entries The Signage Company specializes...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of August,...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Analyze Amazon.com Amazon.com, Inc. (AMZN) is the...Ch. 3 - Analyze Pandora Media Pandora Media, Inc. (P)...Ch. 3 - Analyze World Wrestling Entertainment World...Ch. 3 - Analyze Chipotle Mexican Grill Chipotle Mexican...Ch. 3 - Analyze Nike The following data are taken from...Ch. 3 - Analyze and Compare ATT and Verizon Communications...Ch. 3 - Ethics in Action Chris P. Bacon is the chief...Ch. 3 - Loan application Daryl Kirby opened Squid Realty...Ch. 3 - Communication Delta Air Lines is a major passenger...Ch. 3 - Adjustments and financial statements Several years...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What rules govern data collection?

Accounting Information Systems

Is the following equation correct for finding the value of a constant growth stock? Explain. P0=Dors+g

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Why will global sourcing increase?

Purchasing and Supply Chain Management