Concept explainers
(a)
An adjusting entry is prepared when the
To prepare: The adjusting entries of Company K for the month of June.
(b)
T-Accounts:
T-accounts are referred as T-account because its format represents the letter “T”. The T-accounts consists of the following:
- The title of accounts.
- The debit side (Dr) and,
- The credit side (Cr).
To post: The adjusting entries to the ledger accounts.
(3)
Adjusted trial balance:
The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making adjusting
To prepare: An adjusted trial balance of Company K at June 30.
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- The account balances of Bryan Company as of June 30, the end of the current fiscal year, are as follows: Required 1. Data for the adjustments are as follows: a. Expired or used up insurance, 495 b. Depreciation expense on equipment, 670. c. Depreciation expense on the van, 1,190. d. Salary accrued (earned) since the last payday, 540 (owed and to be paid on the next payday). e. Supplies used during the period, 97. Your instructor may want you to use a work sheet for these adjustments. 2. Journalize the adjusting entries. 3. Prepare an income statement. 4. Prepare a statement of owners equity. Assume that there was an additional investment of 2,000 on June 10. 5. Prepare a balance sheet. 6. Journalize the closing entries using the four steps in the correct sequence. Check Figure Net Income, 13,627arrow_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_forwardAt the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney: In preparing the financial statements, adjustments for the following data were overlooked: Supplies used during April, 2,750. Unbilled fees earned at April 30, 23,700. Depreciation of equipment for April, 1,800. Accrued wages at April 30, 1,400. Instructions 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of net income for April and the total assets, liabilities, and owners equity at April 30. 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 adjustment for supplies used is presented as an example.arrow_forward
- Wyoming Tours Co. is a travel agency. The nine transactions recorded by Wyoming Tours during June 2016, its first month of operations, are indicated in the following T accounts: Indicate for each debit and each credit: (a) whether an asset, liability, owners equity, drawing, revenue, or expense account was affected and (b) whether the account was increased (+) or decreased (). Present your answers in the following form, with transaction (1) given as an example:arrow_forwardKelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, 4,500. 5. Received cash from clients on account, 2,450. 9. Paid cash for a newspaper advertisement, 225. 13. Paid Office Station Co. for part of the debt incurred on April 5, 640. 15. Recorded services provided on account for the period May 115, 9,180. 16. Paid part-time receptionist for two weeks salary including the amount owed on April 30, 750. 17. Recorded cash from cash clients for fees earned during the period May 1-16, 8,360. Record the following transactions on Page 6 of the journal: 20. Purchased supplies on account, 735. 21. Recorded services provided on account for the period May 16-20,4,820. 25. Recorded cash from cash clients for fees earned for the period May 17- 23, 7,900. 27. Received cash from clients on account, 9,520. 28. Paid part-time receptionist for two weeks salary, 750. 30. Paid telephone bill for May, 260. 31. Paid electricity bill for May, 810. 31. Recorded cash from cash clients for fees earned for the period May 26-31, 3,300. 31. Recorded services provided on account for the remainder of May, 2,650. 31. Paid dividends, 10,500. Instructions 1. The cl1art of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2018, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2018, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). (A) Insurance expired during May is 275. (B) Supplies on hand on May 31 are 715. (C) Depreciation of office equipment for May is 330. (D) Accrued receptionist salary on May 31 is 325. (E) Rent expired during May is 1,600. (F) Unearned fees on May 31 are 3,210. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a retained earnings statement, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 of d1e journal. (Income Summary is account #34 in d1e chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.arrow_forwardReece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services accounting clerk prepared the following unadjusted trial balance at July 31, 2019: The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, 6,400. Depreciation of equipment for the year, 2,800. Accrued salaries and wages at July 31, 900. Unexpired insurance at July 31, 1,500. Fees earned but unbilled on July 31, 10,200. Supplies on hand at July 31, 615. Rent unearned at July 31, 300. Instructions 1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. 2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.arrow_forward
- 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 owners 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_forwardGood Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On November 30, 2016, the end of the current year, the accountant for Good Note Company prepared the following trial balances: Instructions Journalize the seven entries that adjusted the accounts at November 30. None of the accounts were affected by more than one adjusting entry.arrow_forwardDao Vang, CPA, was retained by Universal Cable to prepare financial statements for April 2015. Vang accumulated all the ledger balances per Universalâs records and found the following. UNIVERSAL CABLE Trial Balance April 30, 2015  Debit  Credit  Cash $4,024  Accounts Receivable 3,303  Supplies 746  Equipment 10,682  Accumulated Depreciation-Equip.  $1,350  Accounts Payable  2,047  Salaries and Wages Payable  723  Unearned Service Revenue  881  Common Stock  8,762  Retained Earnings  3,691  Service Revenue  5,867  Salaries and Wages Expense 3,202  Advertising Expense 583  Miscellaneous Expense 260  Depreciation Expense 521  $23,321  $23,321  Dao Vang reviewed the records and found the following errors. 1.  Cash received from a customer on account was recorded as $830 instead of $380. 2.   A payment of $76 for advertising expense was entered as a debit to Miscellaneous Expense $76 and a credit to Cash $76. 3.   The first salary payment this monthâĤarrow_forward
- The trial balance columns of the worksheet for Warren Roofi ng at March 31, 2017, are as follows. WARREN ROOFING Worksheet For the Month Ended March 31, 2017  Trial Balance Account Titles Dr Cr Cash 4,500  Accounts Receivable 2,000  Supplies 2,000  Prepaid insurance 1200  Equipment 11,000  Accumulated DepreciationâEquipment  1,250 Accounts Payable  2,500 Unearned Service Revenue  550 Ownerâs Capital  12,900 Ownerâs Drawings 1,100  Service Revenue  6,300 Salaries and Wages Expense 1,300  Miscellaneous Expense 400   23,500 23,500  Other data: 1. A physical count reveals only $480 of roofing supplies are used. 2. Depreciation for March is $450. 3. Unearned revenue amounted to $260 at has been earned 31. 4. Accrued salaries are $500. Instructions. 5. Prepaid insurance for one year and purchased 1st March 2017. (a) Enter the trial balance on aâĤarrow_forwardIn addition to those accounts listed on the trial balance, the chart of accounts for McGee Company also contains the following accounts and account numbers: No. 158 Accumulated DepreciationâEquipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense.Other data:1. Supplies on hand at June 30 are $750.2. A utility bill for $150 has not been recorded and will not be paid until next month.3. The insurance policy is for a year.4. $2,800 of unearned service revenue has been earned at the end of the month.5. Salaries of $1,900 are accrued at June 30.6. The equipment has a 5-year life with no salvage value. It is being depreciated at $250 per month for 60 months.7. Invoices representing $1,200 of services performed during the month have not been recorded as of June 30.Instructions(a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal.(b) Post theâĤarrow_forwardThe adjusted trial balance of Allenâs Automotive Service Company on June 30, 2010 includes the following accounts: Repair Supplies, $300; Accumulated Depreciation, $8,500; Wages Payable, $550, Note Payable $5,000; Repair Revenue, $22,100; Salaries Expense, $5,750; Depreciation Expense, $2,250; Repair Supplies Expense, $1,000; Rent Expense, $400; Utilities Expense, $350; and Interest Expense $250. 1. Prepare an income statement for the month of June.arrow_forward
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