Chapter 3, Problem 3.5AP

(a)

To determine

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

• To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
• To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement: A part of financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of a business. All the expenses are listed on the debit side and the income or revenues are listed on the credit side. The difference of both sides is called net profit or net loss.

To prepare: The ledger accounts at November 1.

(b)

To determine

To prepare: The adjusting entries for the month of November.

(c)

To determine

To prepare: The ledger accounts.

(d)

To determine

To prepare: The adjusted trial balance for Company H.

(e)

To determine

To prepare: The adjusting entries.

(f)

To determine

To prepare: The adjusted trial balance for Company H.

(g)

To determine

To prepare: The income statement, owners’ capital statement, and balance sheet.