At Sekon Company prepayments are debited to expense when paid, and unearned revenues are credited to revenue when cash is received. During January of the current year, the following transactions occurred.
| Jan. 02 | Paid $1,920 for fire protection for the year. |
| 10 | Paid $1,700 for supplies. |
| 15 | Received $6,100 for services to be performed in the future. |
On January 31, it is determined that $2,100 of the services were performed and that there are $650 of supplies on hand.
Instructions
- Journalize and post the January transactions. (Use T-accounts.)
- Journalize and post the adjusting entries at January 31.
- Determine the ending balance in each of the accounts.
The ledger of Passehl Rental Agency on March 31 of the current year includes the selected accounts, shown below, before adjusting entries have been prepared
An analysis of the accounts shows the following.
- The equipment depreciates $400 per month.
- One-third of the unearned rent revenue was earned during the quarter.
- Interest of $500 is accrued on the notes payable.
- Supplies on hand total $750
- Insurance expires at the rate of $300 per month
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.
Meghan Lindh, D.D.S., opened a dental practice on January 1, 2019. During the first month of operations, the following transactions occurred.
- Performed services for patients who had dental plan insurance. At January 31, $875 of such services were performed but not yet recorded.
- Utility expenses incurred but not paid prior to January 31 totaled $650.
- Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable. The equipment depreciates $400 per month. Interest is $500 per month.
- Purchased a one-year malpractice insurance policy on January 1 for $24,000.
- Purchased $1,600 of dental supplies. On January 31, determined that $400 of supplies were on hand.
Instructions
Prepare the adjusting entries on January 31, Account titles are Accumulated Depreciation-Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Utilities Payable.
The trial balance for Pioneer Advertising is shown in below
Pioneer Advertising
Trial Balance
October 31, 2019
Trial Balance
October 31, 2019
Instead of the adjusting entries shown in the textbook at October 31, assume the following adjustment data.
- Supplies on hand at October 31, total $500.
- Expired insurance for the month is $120
- Depreciation for the month is $50
- Services related to unearned service revenue in October worth $600 were performed.
- Services performed but not recorded at October 31 are $360
- Interest accrued at October 31 is $95.
- Accrued salaries at October 31 are $1,625.
Instructions
Prepare the adjusting entries for the items above
The income statement of Montee Co. for the month of July shows net income of $1,450 based on Service Revenue $5,500, Salaries and Wages Expense $2,300, Supplies Expense $1,200, and Utilities Expense $600. In reviewing the statement, you discover the following.
- Insurance expired during July of $400 was omitted.
- Supplies expense includes $250 of supplies that are still on hand at July 31.
- Depreciation on equipment of $150 was omitted.
- Accrued but unpaid salaries and wages at July 31 of $300 were not included.
- Services performed but unrecorded totaled $650.
Instructions
Prepare a correct income statement for July 2019
Selected accounts of Holly Company are shown as follows.
Instructions
After analyzing the accounts, journalize (a) the July transactions and (b) the adjusting entries that were made on July 31.
A partial adjusted trial balance of Frangesch Company at January 31, 2019, shown as following.
Frangesch Company
Adjusted Trial Balance
January 31, 2019
Adjusted Trial Balance
January 31, 2019
Instructions
Answer the following questions, assuming the year begins January 1.
- If the amount in Supplies Expense is the January 31 adjusting entry, and $1,000 of supplies was purchased in January, what was the balance in Supplies on January 1?
- If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for one year, what was the total premium and when was the policy purchased?
- If $3,800 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2018.
The trial balances before and after adjustment for Turnquist Company at the end of its fiscal year are presented below.
Turnquist Company
Trial Balance
August 31, 2020
Trial Balance
August 31, 2020
Instructions
Prepare the adjusting entries that were made.
Johnson Graphics Company was organized on January 1, 2019, by Cameron Johnson. At the end of the first 6 months of operations, the trial balance contained the accounts shown as follows
Analysis reveals the following additional data.
- The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,500 of supplies are on had.
- The note payable was issued on February 1. It is a 9%, 6-month note.
- The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 2019.
- Service revenues are credited to revenue when received. At June 30, services revenue of $1,300 are unearned.
- Revenue for services performed but unrecorded at June 30 totals $2,000.
- Depreciation is $2,250 per year.
Instructions
- Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)
- Prepare an adjusted trial balance.
- Prepare an income statement and an owner’s equity statement for the 6 months ended June 30 and a balance sheet at June 30.
Hong Corporation encounters the following situations:
- Hong collects $1,300 from a customer in 2019 for services to be performed in 2020.
- Hong incurs utility expense which is not yet paid in cash or recorded.
- Hong's employees worked 3 days in 2019 but will not be paid until 2018.
- Hong performs services for customers but has not yet received cash or recorded the transactions.
- Hong received cash for future services and recorded a liability until the service was performed.
- Hong performed consulting services for a client in December 2019. On December 31, it had not billed the client for services provided of $1,200.
- Hong paid cash for an expense and recorded an asset until the item was used up.
- Hong purchased $900 of supplies in 2019; at year-end, $400 f supplies remain unused.
- Hong purchased equipment on January 1, 2019; the equipment will be used for 5 years.
- Hong borrowed $10,000 on October 1, 2019, signing an 8% one-year note payable.
Instructions
Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2019.