Brief Exercise 1
Ritter Advertising Company's trial balance at December 31 shows Supplies $6,700 and Supplies Expense $0. On December 31, there are $2,500 of supplies on hand.
Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the accounts, post the adjusting entry, and indicate the adjusted balance in each account.
Brief Exercise 2
At the end of its first year, the trial balance of Nygaard Company shows Equipment $30,000 and zero balances in Accumulated Depreciation-Equipment and Depreciation Expense. Depreciation for the year is estimated to be $4,000.
Prepare the adjusting entry for depreciation at December 31.
Post the adjustments to T-accounts.
Indicate the balance sheet presentation of the equipment at December 31.
Brief Exercise 3
On July 1, 2014, Dobbs Co. pays $14,400 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31.
For Dobbs Co., journalize and post the entry on July 1 and the adjusting entry on December 31.
Brief Exercise 4
On July 1, 2014, Dobbs Co. pays $14,400 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31.
Journalize and post the entry on July 1 and the adjusting entry on December 31 for Kalter Insurance Co. Kalter uses the accounts Unearned Service Revenue and Service Revenue.
Brief Exercise 5
Hart Corporation encounters the following situations:
Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation, at December 31, 2014.
1. Hart collects $1,300 from a customer in 2014 for services to be performed in 2015.
2. Hart incurs utility expense which is not yet paid in cash or recorded.
3. Hart's employees worked 3 days in 2014 but will not be paid until 2015.
4. Hart performs services for customers but has not yet received cash or recorded the transaction.
5. Hart paid $2,400 rent on December 1 for the 4 months starting December 1.
6. Hart received cash for future services and recorded a liability until the services was performed.
7. Hart performed consulting services for a client in December 2014. On December 31, it had not billed the client for services provided of $1,200.
8. Hart paid cash for an expense and recorded an asset until the item was used up.
9. Hart purchased $900 of supplies in 2014; at year-end, $400 of supplies remain unused.
10. Hart purchased equipment on January 1, 2014; the equipment will be used for 5 years.
11. Hart borrowed $10,000 on October 1, 2014, signing an 8% one-year note payable.
Brief Exercise 6
The ledger of Perez Rental Agency on March 31 of the current year includes the selected accounts, shown below, before adjusting entries have been prepared.
|
Debit
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Credit
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Prepaid Insurance
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$ 3,600
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Supplies
|
2,800
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Equipment
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25,000
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Accumulated Depreciation-Equipment
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$ 8,400
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|
Notes Payable
|
20,000
|
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Unearned Rent Revenue
|
10,200
|
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Rent Revenue
|
60,000
|
|
Interest Expense
|
0
|
|
Salaries and Wages Expense
|
14,000
|
An analysis of the accounts shows the following
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent revenue was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $900.
5. Insurance expires at the rate of $200 per month.
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.
Brief Exercise 7
Selected accounts of Koffman Company are shown below.
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Supplies Expense
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|
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31-Jul
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800
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Supplies
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|
|
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7/1 Bal.
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1,100
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31-Jul
|
800
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10-Jul
|
650
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|
|
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Accounts Receivable
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|
|
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31-Jul
|
500
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|
|
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Salaries and Wages Expense
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|
|
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15-Jul
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1,200
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|
|
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31-Jul
|
1,200
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|
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Salaries and Wages Payable
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|
|
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31-Jul
|
1,200
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|
|
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Unearned Service Revenue
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|
|
|
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31-Jul
|
1,150
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7/1 Bal.
|
1,500
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20-Jul
|
1,000
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|
|
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Service Revenue
|
|
|
|
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14-Jul
|
2,000
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|
|
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31-Jul
|
500
|
|
|
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31-Jul
|
1,150
|
|
|
(a) After analyzing the accounts, journalize the July transactions. (Hint: July transactions were for cash.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
(b) After analyzing the accounts, journalize the adjusting entries that were made on July 31.