Alena Co. was organized on July 1, 2019. quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown bellow
ALENA CO.
Trial Balance
September 30, 2019
Trial Balance
September 30, 2019
Instructions
- Journalize the adjusting entries that were made
- Prepare an income statement and an owner's equity statement for the 3 months ending September 30 and a balance sheet at September 30.
- If the note bears interest at 12%, how many months has it been outstanding?
A review of the ledger of Remina Company at December 31, 2019, produces the following data pertaining to the preparation of annual adjusting entries.
- Prepaid Insurance $10,440. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on April 1, 2018 for $7,920. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2019, for $4,500. This policy has a term of 2 years.
- Unearned Rent Revenue $429,000. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease
Date Term (in months) Monthly Rent Number of Lease Nov. 1 9 $5,000 5 Dec. 1 6 $8,500 4 - Notes Payable $120,000. This balance consists of a note for 9 months at an annual interest rate of 9%, dated November 1.
- Salaries and Wages Payable $0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $700 each per week, and three employees earn $500 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
On Nobember 1, 2019, the account balances of Hamm Equipment Repair were as follows
During November, the following summary transactions were completed.
| Nov. 8 | Paid $1,700 for salaries due employees of which $700 is for October salaries. |
| 10 | Received $3,620 cash from customers on account. |
| 12 | Received $3,100 cash for services performed in November. |
| 15 | Purchased equipment on account $2,000 |
| 17 | Purchased supplies on account $700 |
| 20 | Paid creditors on account $2,700 |
| 22 | Paid November rent $400 |
| 25 | Paid salaries $1,700 |
| 27 | Performed services on account and billed customers for these services $2,200 |
| 29 | Received $600 from customers for further service |
Adjustment data consists of
- Supplies on had $1,400
- Accrued salaries payable $350
- Depreciation for the month is $200
- Services related to unearned service revenue of $1,220 were performed
Instructions
- Enter the November 1 balances in the ledger accounts
- Journalize the November transactions.
- Post to the ledger accounts. Use J1 for the posting reference. Use the following additional accounts: No. 407 Service Revenue, No. 615 Depreciation Expense, No. 631 Supplies Expense, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.
- Prepare a trial balance at November 30.
- Journalize and post adjusting entries.
- Prepare an adjusted trial balance.
- Prepare an income statement and an owner’s equity statement for November and a balance sheet at November 30.
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.
Devin Wolf Company has the following balances in selected accounts on December 31, 2019
All the accounts have normal balances. The information below has been gathered at December 31, 2019.
- Devin Wolf company borrowed $10,000 by signing a 9%, one-year note on September 1, 2019.
- A count of supplies on December 31, 2019, indicates that supplies of $900 are on hand.
- Depreciation on the equipment for 2019 is $1,000.
- Devin Wolf Company paid $2,100 for 12 months of insurance coverage on June 1, 2019.
- On December 1, 2019, Devin Wolf collected $32,000 for consulting services to be performed from December 1, 2019, through March 31, 2020
- Devin Wolf performed consulting services for a client in December 2019. the client will be billed $4,200.
- Devin Wolf Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2019.
Instructions
Prepare adjusting entries for the seven items described above
Zaragoza Company accumulates the following adjustment data at December 31, 2020
- Services performed but not recorded total $1,000.
- Supplies of $300 have been used.
- Utility expenses $225 are unpaid.
- Services related to unearned service revenue of $260 were performed.
- Salaries of $800 are unpaid.
- Prepaid insurance totaling $350 has expired.
Instructions
For each of the above items indicate the following.
- The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
- The status of accounts before adjustment (overstatement or understatement).
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
Minhajur Rahaman
