Concept explainers
JOURNALIZE AND
REQUIRED
- 1. Journalize the adjusting entries on page 5 of the general journal.
- 2. Post the adjusting entries to the general ledger. (If you are not using the working papers that accompany this text, enter the balances provided in this problem before posting the adjusting entries.)
1.
Prepare adjusting entries for the given transactions.
Explanation of Solution
Adjusting entries:
Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.
Prepare adjusting entries for the ending inventory on supplies on November 30, $185.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) | |
November 30 | Supplies expense | 523 | 390 | ||
Supplies | 141 | 390 | |||
(To record the additional amount of supplies that must be used) |
Table (1)
- Supplies expense (Expense) is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the supplies expense by $390.
- Supplies are an asset and there is decrease in the value of an asset. Hence, credit the supplies by 390.
Prepare adjusting entries for the unexpired insurance as of November 30, $800.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
November 30 | Insurance expense | 535 | 500 | |
Prepaid insurance | 145 | 500 | ||
(To record the insurance expense during the end of the year.) |
Table (2)
- Insurance expense (Expense) is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the insurance expense by $500.
- Prepaid insurance is an asset and there is decrease in the value of an asset. Hence, credit the prepaid insurance by $500.
Prepare adjusting entries for the depreciation expense on van, $300.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
November 30 | Depreciation expense | 541 | 300 | |
Accumulated depreciation | 185.1 | 300 | ||
(To record the depreciation expense at the end accounting of the year.) |
Table (3)
- Depreciation expense (Expense) is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the depreciation expense by $300.
- Accumulated depreciation is a contra asset and it has increased. Therefore, credit the accumulated depreciation by $300.
Prepare adjusting entries for the wages earned but not yet paid as of November 30, $190.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
November 30 | Wages expense | 511 | 190 | |
Wages payable | 219 | 190 | ||
(To record the wages earned but not yet paid to the employees at the end of the year.) |
Table (4)
- Wages expense (Expense) is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the wages expense by $190.
- Wages payable is a liability and there is an increase in the value of the liability. Hence, credit the wages payable by $190.
2.
Explanation of Solution
Post the adjusting entries to the general ledger.
Supplies Account No: 141 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 1 | Unadjusted | 575 | ||||
30 | Adjusting | 390 | 185 |
(Table 5)
Prepaid insurance Account No: 145 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 1 | Unadjusted | 1,300 | ||||
30 | Adjusting | 500 | 800 |
(Table 6)
Accumulated Depreciation- Van Account No:185.1 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 30 | Adjusting | 300 | 300 | |||
(Table 7)
Wages Payable Account No: 219 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 30 | Adjusting | 190 | 190 | |||
(Table 8)
Wages Expense Account No: 511 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 1 | Unadjusted | 1,800 | ||||
30 | Adjusting | 190 | 1,990 |
(Table 9)
Supplies expense Account No: 523 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 30 | Adjusting | 390 | 390 | |||
(Table 10)
Insurance Expense Account No: 535 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 30 | Adjusting | 500 | 500 | |||
(Table 11)
Depreciation expense-Van Account No: 541 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
November | 30 | Adjusting | 300 | 300 | |||
(Table 12)
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Chapter 5 Solutions
COLLEGE ACCOUNTING CH. 1-9 (LOW COST)
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