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Chapter 3: Q9E (page 132)

Selected accounts of Urdu Company are shown below.

Supplies

Beg. Bal

800

10 鈦� 31

470

Salaries and Wages Expense

10 鈦� 15

800

10 鈦� 31

600

Unearned Service Revenue

10 鈦� 31

400

10 鈦� 20

650

Service Revenue

10 鈦� 17

2,400

10 鈦� 31

1,650

10 鈦� 31

400

Accounts Receivable

10 鈦� 17

2,400

10 鈦� 31

1,650

Salaries and Wages Payable

10 鈦� 31

600

Supplies Expense

10 鈦� 31

470

Instructions

From an analysis of the T-accounts, reconstruct

(a) the October transaction entries, and

(b) the adjusting journal entries that were made on October 31, 2017. Prepare explanations for each journal entry

Short Answer

Expert verified
  1. The total debit and credit side of the journal is$3,850.
  2. The total debit and credit side of the adjusting journal is$3,120.

Step by step solution

01

Meaning of Journal Entries

A journal entry refers to a record of the monetary business transactions in a date-wise manner and a proper format.

02

(a) Preparing for the transaction entries

Date

Particulars

Debit ($)

Credit ($)

Oct. 15, 2017

Salaries & Wages expense

800

Cash

800

(To record payment of October 15 payroll)

Oct. 17, 2017

Account receivables

2,400

To service revenue

2,400

(To record revenue for services performed for which payment has not yet been received)

Oct. 20, 2017

Cash

650

Unearned service revenue

650

(To record receipt of cash for service not yet performed)

$3,850

$3,850

03

(b) Preparing adjusting journal entries

Date

Particulars

Debit ($)

Credit ($)

Oct. 31, 2017

Supplies expense

470

Supplies

470

(To record the use of supplies during October)

Oct. 31, 2017

Accounts receivables

1,650

Service revenue

1,650

(To record revenue for services performed for which payment has not yet been received)

Oct. 31, 2017

Salaries & Wages expense

600

Salaries & wages payable

600

(To record liability for accrued payroll)

Oct. 31, 2017

Unearned service revenue

400

Service revenue

400

(To reduce unearned service) revenue, account for service that has been performed)

$3,120

$3,120

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Most popular questions from this chapter

Name the accounts debited and credited for each of the following transactions.

  1. Billing a customer for work done.
  2. Receipt of cash from customer on account.
  3. Purchase of office supplies on account.
  4. Purchase of 15 gallons of gasoline for the delivery of truck.

BE3-5 (L02,3) Assume that on February 1, Procter & Gamble (P&G) paid $720,000 in advance for 2 years鈥� insurance coverage. Prepare P&G鈥檚 February 1 journal entry and the annual adjusting entry on June 30.

When the accounts of Daniel Barenboim Inc. are examined, the adjusting data listed below are uncovered on December 31, the end of an annual fiscal period.

  1. The prepaid insurance account shows a debit of \(5,280, representing the cost of a 2-year fire insurance policy dated August 1 of the current year.
  2. On November 1, Rent Revenue was credited for \)1,800, representing revenue from a subrental for a 3-month period beginning on that date.
  3. Purchase of advertising materials for \(800 during the year was recorded in the Advertising Expense account. On December 31, advertising materials of \)290 are on hand.
  4. Interest of $770 has accrued on notes payable.

Instructions

Prepare the following in general journal form.

  1. The adjusting entry for each item.
  2. The reversing entry for each item where appropriate.

(L07) (Cash to Accrual Basis) Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2017, Dr. Accardo collected \(142,000 from her patients and paid \)55,470 in expenses. At January 1, 2017, and December 31, 2017, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. (All long-lived assets are rented.)

January 1, 2017, December 31,2017

Account receivable \(9,250 \)15,927

Unearned service revenue \(2,840 \)4,111

Accrued expenses \(3,435 \)2,108

Prepaid expenses \(1,917 \)3,232

Instructions:

Prepare a schedule that converts Dr. Accardo鈥檚 鈥渆xcess of cash collected over cash disbursed鈥� for the year 2017 to net income on an accrual basis for the year 2017.

E3-7 (L03) (Analyze Adjusted Data) A partial adjusted trial balance of Piper Company at January 31, 2017, shows the following.

PIPER COMPANY

ADJUSTED TRIAL BALANCEJANUARY 31, 2017

Debit (\() Credit(\))Supplies \( 700Prepaid Insurance 2,400Salaries and Wages Payable \) 800UnearnedService Revenue 750Supplies Expense 950Insurance Expense 400Salaries and Wages Expense 1,800Service Revenue 2,000

InstructionsAnswer the following questions, assuming the year begins January 1.(a) If the amount in Supplies Expense is the January 31 adjusting entry, and \(850 of supplies was purchased in January,what was the balance in Supplies on January 1?(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for oneyear, what was the total premium and when was the policy purchased?(c) If \)2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2016?(d) If $1,600 was received in January for services performed in January, what was the balance in Unearned Service Revenueat December 31, 2016?
See all solutions

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