Accounting Adjusting Entries

ADJUSTING AND CLOSING ENTRIES - ACCRUALS

The transactions for the year year 2000 for Anderson Architects Architects have already been recorded. This problem shows how to prepare adjusting entries for December 2000. Dec. 31

A note payable of $6,000 has been outstanding since September 1, 2000. Under the 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.

Dec. 31

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

Dec. 31

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

Dec. 31

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

DATE 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT

DEBIT

Interest Expense Interest Payable Wages Expense Wages Payable Accounts Receivable Service Revenue Advertising Expense Accounts Payable

240

CREDIT

240 650 650 800 800 105 105

The transactions for the year 2000 for Comfort Furniture Co. have been recorded in the accounting system. This assignment requires requires you to prepare adjusting adjusting entries for Comfort Furniture Furniture Co. for December 2000. Dec. 31

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

Dec. 31

The company signed a 12%, six-month note for $6,000 on November 1, 2000.  No interest has been recorded recorded for November and December.

Dec. 31

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

Dec. 31

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

DATE 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT

DEBIT

Wages Expense Wages Payable Interest Expense Interest Payable Accounts Receivable Service Revenue Advertising Expense Accounts Payable

5,000

CREDIT

5,000 120 120 350 350 90 90

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT

DEBIT

Accounts Receivable Service Revenue Interest Expense Interest Payable Wages Expense Wages Payable Advertising Expense Accounts Payable

850

CREDIT

850 500 500 950 950 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

Dec. 31

December fees of $160 will be collected in January.

Dec. 31

$85 will be paid in January for advertising in December.

DATE 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

of $2,000 for December will be paid in January.

ACCOUNT

DEBIT

Interest Expense Interest Payable Salaries Expense Salaries Payable Accounts Receivable Service Revenue Advertising Expense Accounts Payable

480

CREDIT

480 2,000 2,000 160 160 85 85

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT

DEBIT

Accounts Receivable Service Revenue Advertising Expense Accounts Payable Salaries Expense Salaries Payable Interest Expense Interest Payable

2,600

CREDIT

2,600 115 115 1,080 1,080 400 400

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT

DEBIT

Accounts Receivable Service Revenue Interest Expense Interest Payable Salaries Expense Salaries Payable Advertising Expense Accounts Payable

200

CREDIT

200 1,200 1,200 750 750 135 135

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT

DEBIT

Accounts Receivable Service Revenue Interest Expense Interest Payable Salaries Expense Salaries Payable Advertising Expense Accounts Payable

1,250

CREDIT

1,250 300 300 1,150 1,150 115 115

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Depreciation Expense Accumulated Depreciation Rent Expense Prepaid Rent Supplies Expense Supplies Depreciation Expense Accumulated Depreciation Unearned Revenue Service Revenue

DEBIT

CREDIT

400 400 2,400 2,400 500 500 600 600 450 450

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 2000 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Supplies Expense Supplies Depreciation Expense Accumulated Depreciation Rent Expense Prepaid Rent

DEBIT

CREDIT

600 600 600 600 1,600 1,600

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Unearned Revenue Service Revenue Rent Expense Prepaid Rent Supplies Expense Supplies Depreciation Expense Accumulated Depreciation

DEBIT

CREDIT

550 550 3,600 3,600 210 210 600 600

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Unearned Revenue Service Revenue Supplies Expense Supplies Depreciation Expense Accumulated Depreciation Rent Expense Prepaid Rent

DEBIT

CREDIT

500 500 1,000 1,000 500 500 800 800

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Depreciation Expense Accumulated Depreciation Depreciation Expense Accumulated Depreciation Supplies Expense Supplies Rent Expense Prepaid Rent

DEBIT

CREDIT

400 400 400 400 2,000 2,000 4,400 4,400

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Depreciation Expense Accumulated Depreciation Depreciation Expense Accumulated Depreciation Unearned Rent Revenue Rent Revenue Supplies Expense Supplies

DEBIT

CREDIT

12,500 12,500 600 600 3,600 3,600 600 600

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 2000 Dec. 31 Dec. 31 Dec. 31 Dec. 31

ACCOUNT Depreciation Expense Accumulated Depreciation Depreciation Expense Accumulated Depreciation Rent Expense Prepaid Rent Supplies Expense Supplies

DEBIT

CREDIT

1,250 1,250 600 600 3,600 3,600 500 500