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.

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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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Provide answer with general accounting question

Your supervisor at Clearview Corp. asks you to compute the company's cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was$142,800, accounts receivable were $96,500, and accounts payable were $111,600. You also see that the company had sales of $312,000 and that cost of goods sold was $275,000. What is the firm’s cash conversion cycle? (Round to the nearest day.)

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