Concept explainers
Pass the
Explanation of Solution
Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and
Pass the adjusting entry for the given transaction:
General Journal | Page -18 | |||
Date | Description | Post Ref. | Debit | Credit |
2019 | ||||
June 30 | Income Summary | $8,300 | ||
Merchandise Inventory | $8,300 | |||
(To record the beginning inventory) | ||||
June 30 | Merchandise Inventory | $8,800 | ||
Income Summary | $8,800 | |||
(To record the closing inventory) | ||||
June 30 | Unearned Seminar Fees (1) | $2,720 | ||
Seminar Fees Income | $2,720 | |||
(To record the unearned revenue) | ||||
June 30 | Insurance expense (2) | $5,600 | ||
Prepaid Insurance | $5,600 | |||
(To record the prepaid insurance) | ||||
June 30 | $675 | |||
$675 | ||||
(To record the depreciation on equipment) |
Table (1)
General Journal | Page - 18 | |||
Date | Description | Post Ref. | Debit | Credit |
2019 | ||||
June 30 | Wage Expense | $330 | ||
Wages Payable | $330 | |||
(To record the wages payable) | ||||
June 30 | Payroll Taxes Expense | $37.13 | ||
Federal | $9.90 | |||
State Unemployment Tax Payable | $1.98 | |||
Social Security Tax Payable | $4.79 | |||
Medicare Tax Payable | $20.46 | |||
(To record the taxes on accrued wages) | ||||
June 30 | Uncollectible Accounts Expense (4) | $28,000 | ||
Allowance for Doubtful accounts | $28,000 | |||
(To record the uncollectible account) | ||||
June 30 | Rent expense (5) | $5,200 | ||
Prepaid Rent | $5,200 | |||
(To record the prepaid rent) | ||||
June 30 | Supplies Expense (6) | $290 | ||
Supplies | $290 | |||
(To record the supplies) | ||||
June 30 | Interest expense (7) | $41 | ||
Interest Payable | $41 | |||
(To record the interest payable) |
Table (2)
Working note (1):
Calculate the Unearned Seminar Fees:
Working note (2):
Calculate the Insurance expense:
Working note (3):
Calculate the Depreciation Expense - Store Equipment:
Working note (4):
Calculate the Uncollectible Accounts Expense:
Working note (5):
Calculate the Rent expense:
Working note (6):
Calculate the Supplies Expense:
Working note (7):
Calculate the Interest expense:
Calculate the balance amount in the prepaid rent.
The balance of the prepaid rent would be $2,600.
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Chapter 12 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
- On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2019. The merchandise inventory as of June 30, 2019, was 508,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was 33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2019. 4. What would the net income have been if the perpetual inventory system had been used?arrow_forwardPalisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2019 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section and place a check mark () in the Posting Reference column. Journalize the transactions for May, starting on Page 20 of the journal. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. Insert the new balance in the owners capital account. 10. Prepare a post-closing trial balance.arrow_forwardA firm is preparing to make adjusting entries at the end of the accounting period. The balance of the merchandise inventory account is 200,000. If the firm is using the periodic inventory system, what does this balance represent?arrow_forward
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