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Explanation of Solution
Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and
Pass the adjusting entry for the given transaction:
General Journal | Page -18 | |||
Date | Description | Post Ref. | Debit | Credit |
2019 | ||||
June 30 | Income Summary | $8,300 | ||
Merchandise Inventory | $8,300 | |||
(To record the beginning inventory) | ||||
June 30 | Merchandise Inventory | $8,800 | ||
Income Summary | $8,800 | |||
(To record the closing inventory) | ||||
June 30 | Unearned Seminar Fees (1) | $2,720 | ||
Seminar Fees Income | $2,720 | |||
(To record the unearned revenue) | ||||
June 30 | Insurance expense (2) | $5,600 | ||
Prepaid Insurance | $5,600 | |||
(To record the prepaid insurance) | ||||
June 30 | $675 | |||
$675 | ||||
(To record the depreciation on equipment) |
Table (1)
General Journal | Page - 18 | |||
Date | Description | Post Ref. | Debit | Credit |
2019 | ||||
June 30 | Wage Expense | $330 | ||
Wages Payable | $330 | |||
(To record the wages payable) | ||||
June 30 | Payroll Taxes Expense | $37.13 | ||
Federal | $9.90 | |||
State Unemployment Tax Payable | $1.98 | |||
Social Security Tax Payable | $4.79 | |||
Medicare Tax Payable | $20.46 | |||
(To record the taxes on accrued wages) | ||||
June 30 | Uncollectible Accounts Expense (4) | $28,000 | ||
Allowance for Doubtful accounts | $28,000 | |||
(To record the uncollectible account) | ||||
June 30 | Rent expense (5) | $5,200 | ||
Prepaid Rent | $5,200 | |||
(To record the prepaid rent) | ||||
June 30 | Supplies Expense (6) | $290 | ||
Supplies | $290 | |||
(To record the supplies) | ||||
June 30 | Interest expense (7) | $41 | ||
Interest Payable | $41 | |||
(To record the interest payable) |
Table (2)
Working note (1):
Calculate the Unearned Seminar Fees:
Working note (2):
Calculate the Insurance expense:
Working note (3):
Calculate the Depreciation Expense - Store Equipment:
Working note (4):
Calculate the Uncollectible Accounts Expense:
Working note (5):
Calculate the Rent expense:
Working note (6):
Calculate the Supplies Expense:
Working note (7):
Calculate the Interest expense:
Calculate the balance amount in the prepaid rent.
The balance of the prepaid rent would be $2,600.
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Chapter 12 Solutions
LooseLeaf for College Accounting: A Contemporary Approach
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