Accounting Adjusting Entries

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ADJUSTING AND CLOSING ENTRIES - ACCRUALS ADJUSTING AND CLOSING ENTRIES - ACCRUALS

The transactions for the y

The transactions for the year 2000 for Anderson Architear 2000 for Anderson Architects have already been recorded. ects have already been recorded. This problemThis problem shows how to prepare adjusting entries for December 2000.

shows how to prepare adjusting entries for December 2000. Dec.

Dec. 31 31 A A note note payable payable of of $6,000 $6,000 has has been been outstanding outstanding since since September September 1, 1, 2000. Under 2000. Under thethe terms of the note, the note plus interest (12%) is to be paid on March 1, 2001. No interest terms of the note, the note plus interest (12%) is to be paid on March 1, 2001. No interest has been recorded on the note.

has been recorded on the note. Dec.

Dec. 31 31 Wages Wages of of $650 $650 for for December December will will be be paid paid in in January.January. Dec.

Dec. 31 31 Services Services were were performed performed for for a a client client for for $800. The $800. The client client has has not not been been billed billed yet.yet. Dec.

Dec. 31 31 Advertising Advertising costs costs of of $105 $105 for for December December will will be be paid paid in in January.January. DATE

DATE ACCOUNT ACCOUNT DEBIT CREDITDEBIT CREDIT 2000

2000 Dec.

Dec. 31 31 Interest Interest ExpenseExpense Interest Payable Interest Payable 240 240 240 240 Dec.

Dec. 31 31 Wages Wages ExpenseExpense Wages Payable Wages Payable 650 650 650 650 Dec.

Dec. 31 31 Accounts Accounts ReceivableReceivable Service Revenue Service Revenue 800 800 800 800 Dec.

Dec. 31 31 Advertising Advertising ExpenseExpense Accounts Payable Accounts Payable 105 105 105 105 The transactions for the year 2000 for

The transactions for the year 2000 for Comfort Furniture Co. have been recorded in Comfort Furniture Co. have been recorded in the accountingthe accounting system.

system. This assignment requirThis assignment requires you to prepare adjustes you to prepare adjusting entries for Comfort Furnituing entries for Comfort Furniture Co. forre Co. for December 2000.

December 2000. Dec.

Dec. 31 31 Wages Wages owed owed but but unpaid unpaid at at the the end end of of December December were were $5,000.$5,000. Dec.

Dec. 31 31 The The company company signed signed a a 12%, 12%, six-month six-month note note for for $6,000 $6,000 on on November November 1, 1, 2000.2000.  No interest has been record

 No interest has been recorded for November and December.ed for November and December. Dec.

Dec. 31 31 Service Service provided provided to to a a customer customer for for $350 $350 has has not not been been recorded.recorded. Dec.

Dec. 31 31 Advertising Advertising cost cost of of $90 $90 for for December December has has not not been been recorded.recorded. DATE

DATE ACCOUNT ACCOUNT DEBIT CREDITDEBIT CREDIT 2000

2000 Dec.

Dec. 31 31 Wages Wages ExpenseExpense Wages Payable Wages Payable 5,000 5,000 5,000 5,000 Dec.

Dec. 31 31 Interest Interest ExpenseExpense Interest Payable Interest Payable 120 120 120 120 Dec.

Dec. 31 31 Accounts Accounts ReceivableReceivable Service Revenue Service Revenue 350 350 350 350 Dec.

Dec. 31 31 Advertising Advertising ExpenseExpense Accounts Payable Accounts Payable 90 90 90 90

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The transactions for Conway Floor Covering Inc. for the year 2000 have been recorded in the accounting system. This assignment requires you to record the adjusting entries for December 2000.

Dec. 31 Performed services for a client for $850. The customer will be billed in January. Dec. 31 $15,000 was borrowed by signing a 10%, 2 year note on September 1, 2000.

Record the interest on the note.

Dec. 31 Employee wages of $950 for December will be paid in January. Dec. 31 Advertising costs of $95 for December will be paid in January.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Accounts Receivable Service Revenue

850

850 Dec. 31 Interest Expense

Interest Payable

500

500 Dec. 31 Wages Expense

Wages Payable

950

950 Dec. 31 Advertising Expense

Accounts Payable

95

95

Gym on Wheels provides gymnastics lessons at various daycare centers. The transactions for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 The note payable of $8,000 has been outstanding since July 1, 2000. Under the terms of the note, the note plus interest (12%) is to be paid on July 1, 2001. No interest has been recorded on the note.

Dec. 31 Instructors’ salaries of $2,000 for December will be paid in January.

Dec. 31 December fees of $160 will be collected in January. Dec. 31 $85 will be paid in January for advertising in December.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Interest Expense Interest Payable

480

480 Dec. 31 Salaries Expense

Salaries Payable

2,000

2,000 Dec. 31 Accounts Receivable

Service Revenue

160

160 Dec. 31 Advertising Expense

Accounts Payable

85

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The transactions for Borden Realty for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 Services provided to customers for $2,600 were unrecorded at the end of December. Dec. 31 $115 will be paid in January for advertising in December.

Dec. 31 $1,080 of salaries earned by employees during December will be paid in January. Dec. 31 The note payable of $12,000 has been outstanding since September 1, 2000. Under the

terms of the note, the note plus interest (10%) is to be paid on September 1, 2001. No interest has been recorded on the note.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Accounts Receivable Service Revenue

2,600

2,600 Dec. 31 Advertising Expense

Accounts Payable

115

115 Dec. 31 Salaries Expense

Salaries Payable

1,080

1,080 Dec. 31 Interest Expense

Interest Payable

400

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Homework Problem 3 Party Town Incorporated

The transactions for Party Town Inc. for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 A birthday party was arranged in December. The customer will pay $200 in January. Dec. 31 Party Town Inc. borrowed $20,000 by signing a 12%, 2 year note on July 1, 2000.

Record the interest on the note.

Dec. 31 Employee wages of $750 for December will be paid in January. Dec. 31 Advertising costs of $135 for December will be paid in January.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Accounts Receivable Service Revenue

200

200 Dec. 31 Interest Expense

Interest Payable

1,200

1,200 Dec. 31 Salaries Expense

Salaries Payable

750

750 Dec. 31 Advertising Expense

Accounts Payable

135

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The transactions for Star Interior Designs for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 Performed services for a client for $1,250. The customer will be billed in January. Dec. 31 $10,000 was borrowed by signing a 12%, two year note on October 1, 2000.

Record the interest on the note.

Dec. 31 Employee wages of $1,150 for December will be paid in January. Dec. 31 Advertising costs of $115 for December will be paid in January.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Accounts Receivable Service Revenue

1,250

1,250 Dec. 31 Interest Expense

Interest Payable

300

300 Dec. 31 Salaries Expense

Salaries Payable

1,150

1,150 Dec. 31 Advertising Expense

Accounts Payable

115

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ADJUSTING AND CLOSING ENTRIES - DEFERRALS

The transactions for the year 2000 for Anderson Architects have already been recorded. This problem shows how to prepare adjusting entries for Anderson Architects for December 2000.

Dec. 31 A computer was purchased on January 1, 1998 for $1,600. The useful life of the computer is 4 years.

Dec. 31 On October 1, 2000, Anderson Architects had paid $4,800 as rent for a six month period. This had been recorded as prepaid rent.

Dec. 31 The amount of supplies available at the end of December was $200. The amount of supplies at the beginning of the period was $450. $250 of supplies were purchased during the year.

Dec. 31 Furniture costing $3,000 was purchased on Jan 1, 1997. The useful life of the furniture is estimated to be 5 years.

Dec. 31 Services were provided to a customer for $450. The cash was collected in advance on  November 28, 2000.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Depreciation Expense Accumulated Depreciation

400

400 Dec. 31 Rent Expense

Prepaid Rent

2,400

2,400 Dec. 31 Supplies Expense

Supplies

500

500 Dec. 31 Depreciation Expense

Accumulated Depreciation

600

600 Dec. 31 Unearned Revenue

Service Revenue

450

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The transactions for the year 2000 for Comfort Furniture Co. have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for Comfort Furniture for December 2000.

Dec. 31 The amount of supplies available at the end of December was $500. The amount of supplies at the beginning of the period was $1,100.

Dec. 31 On January 1, 1998, Comfort Furniture purchased a computer for $2,400. The estimated useful life of the computer is 4 years. Record the depreciation for the year 2000.

Dec. 31 On November 1, 2000, Comfort Furniture paid $2,400 as rent for a three month period. This had been recorded as prepaid rent.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Supplies Expense Supplies

600

600 Dec. 31 Depreciation Expense

Accumulated Depreciation

600

600 Dec. 31 Rent Expense

Prepaid Rent

1,600

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The transactions for Conway Floor Covering Inc. for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 Services were provided to a customer for $550. The cash was collected in advance on December 10, 2000.

Dec. 31 On September 1, 2000, Conway Floor Covering Inc. had paid $5,400 as rent for a six month period. This had been recorded as prepaid rent.

Dec. 31 The amount of supplies available at the end of December was $400. The amount of supplies at the beginning of the period was $260. $350 of supplies were purchased during the year.

Dec. 31 A computer was purchased on January 1, 1998, for $2,400. The useful life of the computer is 4 years.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Unearned Revenue Service Revenue

550

550 Dec. 31 Rent Expense

Prepaid Rent

3,600

3,600 Dec. 31 Supplies Expense

Supplies

210

210 Dec. 31 Depreciation Expense

Accumulated Depreciation

600

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Gym on Wheels provides gymnastics lessons at various daycare centers. The transactions for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 A number of children registered on December 1 and paid the month's fees in advance. These fees totaled $500 and unearned revenue was credited when the fees were paid. Dec. 31 The amount of supplies available at the end of December was $500. The amount of

supplies at the beginning of the period was $1,500.

Dec. 31 On January 1, 1998, Gym on Wheels had purchased a computer for $2,000. The estimated useful life of the computer is 4 years. Record the depreciation for 2000.

Dec. 31 On December 1, 2000, Gym on Wheels had paid $2,400 as rent for a three month period. This had been recorded as prepaid rent.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Unearned Revenue Service Revenue

500

500 Dec. 31 Supplies Expense

Supplies

1,000

1,000 Dec. 31 Depreciation Expense

Accumulated Depreciation

500

500 Dec. 31 Rent Expense

Prepaid Rent

800

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The transactions for Borden Realty for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 A computer was purchased for $1,600 on January 1, 1998. The useful life of the computer is 4 years.

Dec. 31 Furniture costing $4,800 was purchased on January 1, 2000. The useful life of the furniture is estimated to be 10 years and the salvage value is $800.

Dec. 31 The amount of supplies available at the end of December was $850. The amount of supplies at the beginning of the period was $1,000. $1,850 of supplies were purchased during 2000.

Dec. 31 On September 1, 2000, Borden Realty had paid $6,600 as rent for a six month period. This had been recorded as prepaid rent.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Depreciation Expense Accumulated Depreciation

400

400 Dec. 31 Depreciation Expense

Accumulated Depreciation

400

400 Dec. 31 Supplies Expense

Supplies

2,000

2,000 Dec. 31 Rent Expense

Prepaid Rent

4,400

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The transactions for Party Town Inc. for the year 2000 have been recorded in the accounting system. This assignment requires you to prepare adjusting entries for December 2000.

Dec. 31 Depreciation on the building owned by Party Town Inc. is estimated to be $12,500 for the  period.

Dec. 31 Party Town Inc. purchased furniture for $4,200 on January 1, 1997. The estimated useful life of the furniture is seven years. Record the depreciation for 2000.

Dec. 31 Excess space in the building was rented to another business on October 1, 2000, and six months' rent of $7,200 was collected in advance.

Dec. 31 The amount of party supplies available at the end of December was $150. The amount of supplies at the beginning of the period was $200. $550 of supplies were purchased

during 2000.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Depreciation Expense Accumulated Depreciation

12,500

12,500 Dec. 31 Depreciation Expense

Accumulated Depreciation

600

600 Dec. 31 Unearned Rent Revenue

Rent Revenue

3,600

3,600 Dec. 31 Supplies Expense

Supplies

600

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The transactions for Star Interior Designs for the year 2000 have been recorded in the accounting system. This assignment requires you to record the adjusting entries for December 2000.

Dec. 31 Depreciation on a truck owned by Star Interior Designs is estimated to be $1,250 for the  period.

Dec. 31 Furniture costing $3,600 was purchased on January 1, 1997. The estimated useful life of the furniture is six years. Record the depreciation for 2000.

Dec. 31 Six months' rent of $7,200 was paid in advance on October 1, 2000.

Dec. 31 The amount of supplies available at the end of December was $250. The amount of supplies at the beginning of the period was $200. $550 of supplies were purchased during the year.

DATE ACCOUNT DEBIT CREDIT

2000

Dec. 31 Depreciation Expense Accumulated Depreciation

1,250

1,250 Dec. 31 Depreciation Expense

Accumulated Depreciation

600

600 Dec. 31 Rent Expense

Prepaid Rent

3,600

3,600 Dec. 31 Supplies Expense

Supplies

500

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