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PE 3–1A – Page 131Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusted entry. A. Accumulated DepreciationyesB. Albert Stucky, DrawingsNoC. Office equipmentNoD. Salaries payable YesE. SuppliesNoF. unearned RentYesPE 3–1B – Page 131Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusted entry. A. Building NoB. CashNoC. Interest ExpenseYesD. Miscellaneous ExpenseNoE. Pam Ingersoll, CapitalNoF. prepaid Insurance YesPE 3–2A – Page 131Classify the following items as (1) Prepaid expense, (2) Unearned revenue, (3) Accrued revenue, (4) Accrued expense.A. Cash received for services not yet rendered2B. Insurance paid1C. Rent revenues earned but not received3D. Salaries owned but not yet paid 4PE 3–2B – Page 131Classify the following items as (1) Prepaid expense, (2) Unearned revenue, (3) Accrued revenue, (4) Accrued expense.A. cash received for use of land next month2B. Fees earned but not received 3C. Rent expense owned but not yet paid 4D. Supplies on hand 1PE 3–3A – Page 131The supplies account had a beginning balance of $2.400 and was debited for $3.975 for supplies purchased during the year.Journalize the adjusting entry required at the end of the year assuming the amount of supplies on hand is $1.375.Dec. 31Supplies ExpenseSuppliesSupplies used (2,000 – 760)5.0005.000Supplies used ($2,400 + $3,975 – $1,375).PE 3–7A – Page 132The estimated amount of depreciation on equipment for the current year is $11.500. Journalize the adjusting entry to record the depreciation. Dec. 31Depreciation Expense Accumulated Depreciation – Equipment11.50011.500PE 3–4A – Page 131The balance in the unearned fees account, before adjustment at the end of the year, is $178.900.Journalize the adjusting entry required assuming the amount of unearned fees at the end of the year is $18.650.Dec. 31Unearned feesFees earned 160.250160.250Fees earned ($178,900 – $18,650).PE 3–5A – Page 131At the end of the current year, $11.600 of fees have been earned but not been billed to clients. Journalize the adjusting entry to record the accrued fees. Dec. 31Accounts Receivable Fees earned 11.60011.600PE 3–6A – Page 132Stress fees Realty Co. pays weekly salaries of $18.000 on Friday for five-day workweek ending on that day.Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Thursday.Dec. 31salaries expensesalaries payable14.40014.400Accrued salaries [($18,000/5 days) × 4 days].EX 3–1 – Page 133Classify the following items as (A) Prepaid expense, (B) Unearned revenue, (C) Accrued revenue, (D) Accrued expense.1. A three-year premium paid on a fire insurance policy.A2. Fees earned but not yet received.C3. Fees received but not yet earned.B4. Salary owed but not yet paid.D5. Subscription received in advance by a magazine publisher.B6. Supplies on hand.A7. Taxes owed but payable in following period.D8. Utilities owed but not yet paid.DPR 3–1A – Page 138On August 31, 2010, the following data were accumulated to assist the accountant in preparing the adjusting entries for Cobalt Realty:A. Fees accrued but unbilled at August 31 are $9.560.B. The supplies account balance on August 31 is #3.150. The supplies on hand at August 31 are $900.C. Wages accrued but not paid at August 31 are $1.200.D. The unearned rent account balance at August 31 is $9.375, representing the receipt of an advance payment on August 1 of three months’ rent from tenants.E. Depreciation of office equipment is $1.600.Instruction:1. Journalize the adjusting entries required at August 31, 2010.Solution: DateDescriptionDebitCreditAAccounts Receivable Fees EarnedAccrued fees earned9,5609,560BSupplies Expense SuppliesSupplies used ($3,150 – $900)2,2502,250CWages Expense Wages PayableAccrued wages1,2001,200DUnearned Rent Rent RevenueRent earned ($9,375/3)3,1253,125EDepreciation Expense Accumulated Depreciation—EquipmentDepreciation expense1,6001,600PR 3–5A – Page 140Jacksonville Financial Services Co, which specialize in appliance repair services, is owned and operated by Cindy Latty.Jacksonville Financial Services Co, accounting clerk prepared the unadjusted trial balance at December 31, 2010, show at the top of the next page.Jacksonville Financial Services CoUnadjusted Trial Balance December 31, 2010Debit BalanceCredit BalanceCash10.200Accounts Receivable 34.750Prepaid Insurance 6.000Supplies1.725Land50.000Building80.750Accumulated Depreciation- Building37.850Equipment45.000Accumulated Depreciation- Equipment17.650Accounts payable3.750Unearned Rent3.600Cindy Latty, Capital103.550Cindy Latty, Drawing 8.000Fees Earned158.600Salaries and Wages Expense56.850Utilities Expense 14.100Advertising Expense7.500Repairs Expense6.100Miscellaneous Expense4.025325.000325.000The data needed to determine year-end adjustments are as follows:A. Depreciation of building for the year, $2.100.B. Depreciation of equipment for the year, $3.000.C. Accrued salaries and wages at December 31, $800.D. Unexpired insurance at December 31, $1.500.E. Fees earned but unbilled on December 31, $2.150.F. Supplies on hand at December 31, $600.G. Rent unearned at December 31, $1.500.Instruction:1. Journalize the adjusting entries. Add additional accounts as needed.2. Determined the balance of the accounts affected by the adjusting entries and prepare an adjusted trial balance.Solution: 1. DateDescriptionDebitCreditADepreciation Expense—Building Accumulated Depreciation—BuildingBuilding depreciation2,1002,100BDepreciation Expense—Equipment Accumulated Depreciation—EquipmentEquipment depreciation3,0003,000CSalaries and Wages Expense Salaries and Wages PayableAccrued salaries and wages800800DInsurance Expense Prepaid InsuranceInsurance expired ($6,000 – $1,500)4,5004,500EAccounts Receivable Fees EarnedAccrued fees earned2,1502,150FSupplies Expense SuppliesSupplies used ($1,725 – $600)1,1251,125GUnearned Rent Rent RevenueRent earned ($3,600 – $1,500)2,1002,1002. Jacksonville Financial Services CoAdjusted Trial Balance December 31, 2010Debit BalanceCredit BalanceCash10.200Accounts Receivable 36.900Prepaid Insurance 1.500Supplies600Land50.000Building80.750Accumulated Depreciation- Building39.950Equipment45.000Accumulated Depreciation- Equipment20.650Accounts payable3.750Salaries and Wages Payable800Unearned Rent1.500Cindy Latty, Capital103.550Cindy Latty, Drawing 8.000Fees Earned160,750Rent Revenue2,100Salaries and Wages Expense57,650Utilities Expense 14.100Advertising Expense7.500Repairs Expense6.100Insurance Expense4,500Depreciation Expense—Equipment3,000Depreciation Expense—Building2,100Supplies Expense1,125Miscellaneous Expense4.025333,050333,050Illustrative Problem – Page 128 -129Three years ago, T. Roderick organized Harbor Reality.At July 31, 2012, the end of the current year, the unadjusted trial balance of Harbor Reality appears as show below.Harbor Reality Unadjusted Trial Balance July 31, 2012Debit BalanceCredit BalanceCash3.425Accounts Receivable 7.000Supplies1.270Prepaid Insurance620Office Equipment51.650Accumulated Depreciation- Office Equipment9.700Accounts payable925Wages payable 0Unearned fees1.250T. Roderick, Capital29.000T. Roderick, Drawing5.200Fees Earned59.125Wages Expenses22.415Depreciation Expenses0Rent Expenses4.200Utilities Expense 2.715Supplies Expense0Insurance Expense0Miscellaneous Expense1.505100.000100.000The data needed to determine year-end adjustments are as follows:A. Supplies on hand at July 31, 2012, $380.B. Insurance premiums expired during the year, $315.C. Depreciation of equipment during the year, $4.950.D. Wages accrued but not paid at July 31, 2012, $440.E. Accrued fees earned but not recorded at July 31, 2012, $1.000.F. unearned fees at July 31, 2012, $750.Instruction:1. Prepare the necessary adjusting journalize entries. 2. Determined the balance of the accounts affected by the adjusting entries and prepare an adjusted trial balance.Solution: 1. DateDescriptionDebitCreditJuly 31Supplies Expense SuppliesSupplies used ($1,270 – $380)890890July 31Insurance Expense Prepaid InsuranceInsurance expired315315July 31Depreciation ExpenseAccumulated Depreciation—Office equipmentEquipment depreciation4.9504.950July 31Wages Expense Wages PayableAccrued wages440440July 31Accounts Receivable Fees EarnedAccrued fees earned1.0001,000July 31Unearned Rent Rent RevenueRent earned ($1.250 – $750)5005002.Harbor Reality Unadjusted Trial Balance July 31, 2012Debit BalanceCredit BalanceCash3.425Accounts Receivable 8.000Supplies380Prepaid Insurance305Office Equipment51.650Accumulated Depreciation- Office Equipment14.650Accounts payable925Wages payable 440Unearned fees750T. Roderick, Capital29.000T. Roderick, Drawing5.200Fees Earned60.625Wages Expenses22.855Depreciation Expenses4.950Rent Expenses4.200Utilities Expense 2.715Supplies Expense890Insurance Expense315Miscellaneous Expense1.505106.390106.390 ................
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