Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year. To prepare: 1) Adjustment entries as of October 31, 2017. 2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Question

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Answer 1

Question

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000

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Answer 2

Question

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000

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Answer 3

Question

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000

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Answer 4

Question

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000

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Answer 5

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000

Answer 6

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000

Answer 7

Chapter 3, Problem 2BPSB

To determine

Concept Introduction:

Adjustment entry - Adjustment entry is a part of the accrual basis of accounting. It is made at the end of the accounting year to recognize all incomes and expenses incurred for the accounting year.

To prepare:

1) Adjustment entries as of October 31, 2017.

2) Journal entries to record the first subsequent cash transaction in November 2017 for parts c and e.

Answer 8

Expert Solution & Answer

Explanation of Solution

1) Adjustment entries as of October 31, 2017 are as under:

S. No	Particulars	Debit ($)	Credit ($)
a.	Office supplies expense	4,370
	To Office supplies		4,370
b.	Insurance expense	4,730
	To Prepaid Insurance		4,730
c.	Salaries expense	4,000
	To Salaries Payable		4,000
d.	Depreciation expense- Building	5,400
	To Accumulated depreciation- Building		5,400
e.	Rent Receivable	1,000
	To Rent earned		1,000
f.	Unearned Rent	1,450
	To Rent earned		1,450

$\begin{array}{l} W o r k i n g : \\ a . O f f i c e supplies expense = O p e n i n g + P u r c h a s e s - C l o s i n g \\ = 600 + 4, 570 - 800 \\ = 4, 370 \\ b . I n s u r a n c e E x p e n s e = (6000 \times 12 / 24) + (7, 200 \times 7 / 36) + (1, 320 \times 3 / 12) \\ = 4, 730 \\ c . S a l a r i e s E x p e n s e = N o . o f e m p l o y e e s \times P e r d a y s a l a r y \times N o . o f d a y s \\ = 4 \times 1000 \times 1 \\ = 4, 000 \\ f . Rent e a r n e d = N o . o f m o n t h s \times P e r M o n t h Rent \\ = 2 \times 725 \\ = 1, 450 \end{array}$

2) Journal entries to record the cash transaction in November 2017 for parts c and e are as under:

S.No	Particulars	Debit ($)	Credit ($)
c.	Salaries Payable	4,000
	Salaries expense	16,000
	To Cash		20,000
e.	Cash	2,000
	To Rent receivable		1,000
	To Rent earned		1,000