Accounting-Adjusting Journal Entries

July 17, 2016 | Author: Mary | Category: Types, School Work
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Demostration of Adjusting Journal Entries....

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Accounting Adjusting Entries

Data for original entries and date for adjusting entries. •

June 30, 2006 Love Thy Pet Inc,. paid $19,200 cash to the rental company for the next 12 months rent.



December 31, 2006 Adjusted the amount of rent used during the period between June 30 and December 31.



June 28, 2006 Received $5,000 cash for two bulldogs to be delivered within the next year by a breeder.



December 31, 2006 Record revenues earned during the past six months. One of the bull doges was delivered by the breeder



June 6, 2006 Love Thy Pet Inc,. purchased office equipment for $15,000 cash with an estimated usefully life of 5 years. The residual value of the equipment is expected to be $3,000.



December 31, 2006 Record depreciation for office equipment. Time period is June 6, 2006 to December 31, 2006. Love Thy Pet uses the straight-line method of depreciation.



June 1, 2006 The Hatfield Company borrowed $10,000 for Love Thy Pet Inc,. The note is for 1 year and has an interest rate of 6%.



December 31, 2006 Record the accrued interest for the Hatfield Company’s Notes receivable. The time period is from June 1, 2006 to December 31, 2006. Use the simple interest method.



December 31, 2006 Two employees are paid in total $800 each bi-week to be paid evenly over a 5 day work week. What would be the accrued expense for employees?

Types of Adjustments Prepayments: Prepaid Expenses Unearned Revenues Depreciation Accruals: Accrued Revenues Accrued Expenses

Prepayments Types of Adjustments: Prepaid Expenses Unearned Revenues Depreciation

Prepaid Expense Original Journal Entry

June 30, 2006 Love Thy Pet Inc,. paid $19,200 cash to the rental company for the next 12 months rent.

Prepaid Expenses Original Ledger Entries

June 30, 2006 Love Thy Pet Inc,. paid $19,200 cash to the rental company for the next 12 months rent.

Prepaid Expense Adjusting Journal Entry

December 31, 2006 Adjusted the amount of rent used during the period between June 30 and December 31. 19,200 X 6/12 = 9,600

Prepaid Expenses Adjusting Ledger Entries

December 31, 2006 Adjusted the amount of rent used during the period between June 30 and December 31. 19,200 X 6/12 = 9,600

Unearned Revenue Original Journal Entry

June 28, 2006 Received $5,000 cash for two bulldogs to be delivered within the next year by a breeder.

Unearned Revenue Original Ledger Entries

June 28, 2006 Received $5,000 cash for two bulldogs to be delivered within the next year by a breeder.

Unearned Revenue Adjusting Journal Entry

December 31, 2006 Record revenues earned during the past six months. One of the bull doges was delivered by the breeder

Unearned Revenue Adjusting Ledger Entries

December 31, 2006 Record revenues earned during the past six months. One of the bull doges was delivered by the breeder

Depreciation Original Journal Entry

June 6, 2006 Love Thy Pet Inc,. purchased office equipment for $15,000 cash with an estimated usefully life of 5 years. The residual value of the equipment is expected to be $3,000.

Depreciation Original Ledger Entries

June 6, 2006 Love Thy Pet Inc,. purchased office equipment for $15,000 cash with an estimated usefully life of 5 years. The residual value of the equipment is expected to be $3,000.

Depreciation Adjusting Journal Entry

December 31, 2006 Record depreciation for office equipment. Time period is June 6, 2006 to December 31, 2006. Love Thy Pet uses the straight-line method of depreciation. $15,000 – 3,000 = 12,000 / 5 = 2,400 X 7/12 = 1,400

Depreciation Adjusting Ledger Entries

December 31, 2006 Record depreciation for office equipment. Time period is June 6, 2006 to December 31, 2006. Love Thy Pet Inc,. uses the straight-line method of depreciation. $15,000 – 3,000 = 12,000 / 5 = 2,400 X 7/12 = 1,400

Accruals Types of Adjustments: Accrued Revenues Accrued Expenses

Accrued Revenue Original Journal Entry

June 1, 2006 The Hatfield Company borrowed $10,000 for Love Thy Pet Inc,. The note is for 1 year and has an interest rate of 6%.

Accrued Revenue Original Ledger Entries

June 1, 2006 The Hatfield Company borrowed $10,000 for Love Thy Pet Inc,. The note is for 1 year and has an interest rate of 6%.

Accrued Revenue Adjusting Journal Entry

December 31, 2006 Record the accrued interest for the Hatfield Company’s Notes receivable. The time period is from June 1, 2006 to December 31, 2006. Use the simple interest method. 10,000 X .06 = 600 X 7/12 = 350

Accrued Revenue Adjusting Ledger Entries

December 31, 2006 Record the accrued interest for the Hatfield Company’s Notes receivable. The time period is from June 1, 2006 to December 31, 2006. Use the simple interest method. 10,000 X .06 = 600 X 7/12 = 350

Accrued Expense Salary Expense Calendar for December 20XX SUN

MON

TUE

WED

THUR

FRI

SAT

1

2

3

4

Pay Day 9 10

11

5

6

7

8

12

13

14

15

16

17

18 25

19

20

21

22

Pay Day 23 24

26

27

28

29

30

Accrued Expense Adjusting Journal Entry

December 31, 2006 Two employees are paid in total $800 each bi-week to be paid evenly over a 5 day work week. What would be the accrued expense for employees? 1600 X 9/10 = 1440

Accrued Expense Adjusting Ledger Entries

December 31, 2006 Two employees are paid in total $800 each bi-week to be paid evenly over a 5 day work week. What would be the accrued expense for employees? 1600 X 9/10 = 1440

Additional Information that can be used to practice adjusting entries. Use this information to practice adjusting entries not show in this slide show demonstration. Data from original entries and date for adjusting entries. • • • • • •

January 31, 2006 Marie purchased a two-year insurance policy costing $2,400 that will expire January 31, 2008. December 31, 2007 record the use of the insurance policy up to December 31, 2007. January 5, 2006 Marie purchased pet store equipment for $7,500 in cash. February 1, 2006 Marie purchased and placed into use pet store equipment for $30,000 and took out a $50,000 note with terms of 1 year at 6%. December 31, 2006 Accrue interest on notes payable. December 31, 2006 record depreciation on pet store equipment. Straight line method of depreciation is used.

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