Concept explainers
JOURNALIZE AND
REQUIRED
- 1. Journalize the adjusting entries on page 3 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 October 31, $210.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
October 31 | Supplies expense | 523 | 415 | |
Supplies | 141 | 415 | ||
(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 $415.
- Supplies are an asset and there is decrease in the value of an asset. Hence, credit the supplies by 415.
Prepare adjusting entries for the unexpired insurance as of October 31, $800.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
October 31 | Insurance expense | 535 | 150 | |
Prepaid insurance | 145 | 150 | ||
(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 $150.
- Prepaid insurance is an asset and there is decrease in the value of an asset. Hence, credit the prepaid insurance by $150.
Prepare adjusting entries for the depreciation of automobile, $250.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
October 31 | Depreciation expense | 541 | 250 | |
Accumulated depreciation | 185.1 | 250 | ||
(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 $250.
- Accumulated depreciation is a contra asset and it has increased. Therefore, credit the accumulated depreciation by $250.
Prepare adjusting entries for the wages earned but not yet paid as of October 31, $175.
Date | Account Titles and explanation | Post. Ref. | Debit ($) | Credit ($) |
October 31 | Wages expense | 511 | 175 | |
Wages payable | 219 | 175 | ||
(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 $175.
- Wages payable is a liability and there is an increase in the value of the liability. Hence, credit the wages payable by $175.
2.
Post the adjusting entries to the general ledger.
Explanation of Solution
Post the adjusting entries to the general ledger.
Supplies Account No: 141 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 1 | Unadjusted | 625 | 625 | |||
31 | Adjusting | 415 | 210 |
(Table 5)
Prepaid insurance Account No: 145 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 1 | Unadjusted | 950 | 950 | |||
31 | Adjusting | 150 | 800 |
(Table 6)
Accumulated Depreciation-Automobile Account No: 185.1 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 31 | Adjusting | 250 | 250 | |||
(Table 7)
Wages Payable Account No: 219 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 31 | Adjusting | 175 | 175 | |||
(Table 8)
Wages Expense Account No: 511 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 1 | Unadjusted | 1,560 | ||||
31 | Adjusting | 175 | 1,735 |
(Table 9)
Supplies expense Account No: 523 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 31 | Adjusting | 415 | 415 | |||
(Table 10)
Insurance Expense Account No: 535 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 31 | Adjusting | 150 | 150 | |||
(Table 11)
Depreciation expense-Automobile Account No: 541 | |||||||
Date | Item | Post ref. | Debit | Credit | Balance | ||
Debit | Credit | ||||||
October | 31 | Adjusting | 250 | 250 | |||
(Table 12)
Want to see more full solutions like this?
Chapter 5 Solutions
COLLEGE ACCOUNTING CH. 1-9 (LOW COST)
- REVERSING ENTRIES From the work sheet used in Exercise 15-5A, identify the adjusting entry(ies) that should be reversed and prepare the reversing entry(ies).arrow_forwardREVERSING ENTRIES From the spreadsheet used in Exercise 15-5A, identify the adjusting entry(ies) that should be reversed and prepare the reversing entry(ies).arrow_forwardBased on completing the adjustment journal entries. Complete the chartarrow_forward
- Use the following information from the Adjustments columns of a 10-column work sheet to prepare the necessary adjusting journal entries (a) through (e).arrow_forwardRequired: Prepare the following: a. All necessary adjusting entries. b. Post-closing trial balance. c. Table for the computation of over and underestimation. d. Entries to record the adjustmentarrow_forwardMake adjustments on the Adjusting Journal Entries. Remember to include a description under each journal entry.arrow_forward
- can you prepare the adjusting entries into the general journalarrow_forwardUsing your corrected adjusting journal entries from Assignment #2, post your adjusting entries into the General Ledger included in the Workpaper file for Assignments #2 and #3. Prepare an Adjusted Trial Balance on the adjusted trial balance sheet included in the Workpaper file for Assignment #3. Prepare an income statement, statement of owner's equity, and a classified balance sheet in the Workpaper file on the financial statement sheet included for Assignment #3. Note, you will be "creating" these financials on your own. You can use the following financial statements template as a guide: Financial Statement Template.pdf Download Financial Statement Template.pdf Journalize the required closing entries in the General Journal included in the Workpaper file for Assignment #3. Post your closing entries to the General Ledger included in the Workpaper file for Assignments #2 and #3. Prepare a Post-Closing Trial Balance in the post-closing trial balance sheet included in the Workpaper…arrow_forwardQuestion Description Prepare the adjusting journal entries for the following situations and submit in an excel Spreadsheet. Please provide a brief explaining as to your response.arrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning