Adjusting entries : Adjusting entries are those entries which are made at the end of the period to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle Accounting rules for journal entries: To increase balance: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To determine: Adjusting entries for the agency P on March 31.

Question

Trial Balance Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts: Cash (1) 40,000 (2) 4,000 (7) 13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Equipment (3) 15,000 Dividends (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000 (3) 10,000 (5) 20,500 Supplies (2) 4,000 (8) 2,200 Common Stock Operating Expenses (1) 40,000 (4) 6,175 (8) 2,200

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Chapter 3, Problem 3.7E

To determine

Adjusting entries: Adjusting entries are those entries which are made at the end of the period to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle

Accounting rules for journal entries:

To increase balance: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To determine: Adjusting entries for the agency P on March 31.

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Trial Balance Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts: Cash (1) 40,000 (2) 4,000 (7) 13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Equipment (3) 15,000 Dividends (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000 (3) 10,000 (5) 20,500 Supplies (2) 4,000 (8) 2,200 Common Stock Operating Expenses (1) 40,000 (4) 6,175 (8) 2,200

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