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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

JOURNALIZE AND POST ADJUSTING ENTRIES FROM THE WORK SHEET Refer to Problem 5-15B and the following additional information:

images

REQUIRED

  1. 1. Journalize the adjusting entries on page 3 of the general journal.
  2. 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.

To determine

Prepare adjusting entries for the given transactions.

Explanation

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.

DateAccount Titles and explanationPost. Ref.Debit ($)Credit ($)
October 31Supplies expense 523415 
      Supplies [$625$210]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.

DateAccount Titles and explanationPost. Ref.Debit ($)Credit ($)
October 31Insurance expense535150 
      Prepaid insurance [$950$800]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

2.

To determine

Post the adjusting entries to the general ledger.

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