Explanation Adjusting entries: Adjusting entries are those entries, which are made at the end of the accounting period to record the revenues of the period in which they have been earned and to record the expenses of the period in which they have been incurred. This is made to update all the balances of assets and liabilities accounts on the balance sheet, and to ascertain the accurate amount of net income (loss) on the income statement to maintain the records according to the accrual basis principle. Record the adjusting entry for the service revenue. Date Accounts title and explanation Ref. Debit ($) Credit ($) August 31 Accounts receivable (1) 600 Service revenue 600 (To record the adjusting entry for service revenue) Table (1) Accounts receivable is an asset. There is an increase in the asset account. Hence, debit accounts receivable with $600. Service revenue is a revenue account which is a component of stockholders’ equity . There is an increase in the revenue account which increases the stockholders’ equity account. Hence, credit service revenue with $600. Working note: Accounts receivable = Amount after adjustment − Amount before adjutment = $ 9 , 400 − $ 8 , 800 = $ 600 (1) Record the adjusting entry for supplies expense: Date Accounts title and explanation Ref. Debit ($) Credit ($) August 31 Supplies expense (2) 2,000 Supplies 2,000 (To record the adjusting entry for supplies expense) Table (2) Supplies expense is an expense account which is a component of stockholders’ equity. There is an increase in the expense account which decreases the stockholders’ equity account. Hence, debit supplies expense with $2,000. Supplies are an asset. There is a decrease in the asset account. Hence, credit supplies with $2,000. Working note: Supplies expense = Supplies before adjustment − Supplies after adjustment = $ 2 , 500 − $ 500 = $ 2 , 000 (2) Record the adjusting entry for insurance expense: Date Accounts title and explanation Ref. Debit ($) Credit ($) August 31 Insurance expense 1,500 Prepaid insurance 1,500 (To record the adjusting entry for insurance expense) Table (2) Insurance expense is an expense account which is a component of stockholders’ equity. There is an increase in the expense account which decreases the stockholders’ equity account. Hence, debit insurance expense with $1,500. Prepaid insurance is an asset. There is a decrease in the asset account. Hence, credit prepaid insurance with $1,500. Record the adjusting entry for depreciation expense: Date Accounts title and explanation Ref

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

6th Edition

ISBN: 9781119191674

Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

Publisher: WILEY

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Chapter 4, Problem 21E

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Prepare the adjusting entries.

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Chapter 4, Problem 20E

Chapter 4, Problem 22E

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Chapter 4 Solutions

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

Ch. 4 - Prob. 1Q Ch. 4 - Prob. 2Q Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - Prob. 5Q Ch. 4 - Prob. 6Q Ch. 4 - Prob. 7Q Ch. 4 - Prob. 8Q Ch. 4 - Prob. 9Q Ch. 4 - Prob. 10Q

Ch. 4 - Prob. 11Q Ch. 4 - Prob. 12Q Ch. 4 - Prob. 13Q Ch. 4 - Prob. 14Q Ch. 4 - Prob. 15Q Ch. 4 - Prob. 16Q Ch. 4 - Prob. 17Q Ch. 4 - Prob. 18Q Ch. 4 - Prob. 19Q Ch. 4 - Prob. 20Q Ch. 4 - Prob. 21Q Ch. 4 - Prob. 22Q Ch. 4 - Prob. 23Q Ch. 4 - Prob. 24Q Ch. 4 - Prob. 25Q Ch. 4 - Prob. 26Q Ch. 4 - Prob. 27Q Ch. 4 - Prob. 28Q Ch. 4 - Prob. 29Q Ch. 4 - Prob. 30Q Ch. 4 - Prob. 31Q Ch. 4 - Prob. 32Q Ch. 4 - Prob. 33Q Ch. 4 - Prob. 34Q Ch. 4 - Prob. 35Q Ch. 4 - Prob. 36Q Ch. 4 - Prob. 1BE Ch. 4 - Prob. 2BE Ch. 4 - Prob. 3BE Ch. 4 - Prob. 4BE Ch. 4 - Prob. 5BE Ch. 4 - Prob. 6BE Ch. 4 - Prob. 7BE Ch. 4 - Prob. 8BE Ch. 4 - Prob. 9BE Ch. 4 - Prob. 10BE Ch. 4 - Prob. 11BE Ch. 4 - Prob. 12BE Ch. 4 - Prob. 13BE Ch. 4 - Prob. 14BE Ch. 4 - Prob. 15BE Ch. 4 - Prob. 1DIE Ch. 4 - Prob. 2DIE Ch. 4 - Prob. 3DIE Ch. 4 - Prob. 4ADIE Ch. 4 - Prob. 4BDIE Ch. 4 - Prob. 1E Ch. 4 - Prob. 2E Ch. 4 - Prob. 3E Ch. 4 - Prob. 4E Ch. 4 - Prob. 5E Ch. 4 - Prob. 6E Ch. 4 - Prob. 7E Ch. 4 - Prob. 8E Ch. 4 - Prob. 9E Ch. 4 - Prob. 10E Ch. 4 - Prob. 11E Ch. 4 - Prob. 12E Ch. 4 - Prob. 13E Ch. 4 - Prob. 14E Ch. 4 - Prob. 15E Ch. 4 - Prob. 17E Ch. 4 - Prob. 18E Ch. 4 - Prob. 20E Ch. 4 - Prob. 21E Ch. 4 - Prob. 22E Ch. 4 - Prob. 23E Ch. 4 - Prob. 2AP Ch. 4 - Prob. 3AP Ch. 4 - Prob. 4AP Ch. 4 - Prob. 5AP Ch. 4 - Prob. 6AP Ch. 4 - Prob. 7AP Ch. 4 - Prob. 1CACR Ch. 4 - Prob. 2CACR Ch. 4 - Prob. 3CACR Ch. 4 - Prob. 4CACR Ch. 4 - Prob. 1EYCT Ch. 4 - Prob. 2EYCT Ch. 4 - Prob. 3EYCT Ch. 4 - Prob. 4EYCT Ch. 4 - Prob. 6EYCT Ch. 4 - Prob. 7EYCT Ch. 4 - Prob. 8EYCT Ch. 4 - Prob. 9EYCT Ch. 4 - Prob. 1IFRS

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