DFA 5058 (Financial Accounting)/Chapter 4
TUTORIAL CHAPTER 4
ACCOUNTING CYCLE III
Question 1
Prepare the adjusting entries in the journal for June transactions as listed below:
1. The advertising supplies at the beginning of the month were RM2,500.
Advertising supplies on hand at June 30 totals RM1,000.
2. Accrued salaries at June 30 are RM1,200.
3. Depreciation for equipment for the month is RM50.
4. Unearned revenue earned in June totals RM600.
5. Services provided but not recorded at June 30 are RM300.
6. Interest accrued at June 30 is RM70.
7. Expired insurance for the month is RM100.
Answer 1
General Journal
Date
Account Titles and Explanation
June 30 Advertising Supplies Expense
Advertising Supplies
Salaries Expense
Salaries Payable
Depreciation Expense - Equipment
Accumulated Depreciation- Equipment
Unearned Revenue
Service Revenue
Accounts Receivable
Service Revenue
Interest Expense
Interest Payable
Insurance Expense
Prepaid Insurance
Ref
Debit
1,500
Credit
1,500
1,200
1,200
50
50
600
600
300
300
70
70
100
100
Question 2
Show the adjusting journal entries for the following transactions occurred in July:
1. Prepayment of RM12,000 cash for one-year office rent has expired for the
month of July.
2. Office supplies used during the month, RM500
3. Wages accrued, but unpaid, RM600.
4. Fees earned, but unbilled, RM5,000.
5. Depreciation of furniture is estimated to be RM800 per month.
DFA 5058 (Financial Accounting)/Chapter 4
Answer 2
General Journal
Date
Account Titles and Explanation
Jul 31 Rent Expense (12,000/12)
Prepaid Rent
Supplies Expense
Supplies
Wages Expense
Wages Payable
Accounts Receivable
Fees Revenue
Depreciation Expense - Furniture
Accumulated Depreciation – Furniture
Ref
Debit
1,000
Credit
1,000
500
500
600
600
5,000
5,000
800
800
Question 3
The schedule presents the trial balance for Team Cafe at the end of the fiscal
year. The following information is available to assist in the preparation of
adjusting entries:
Team Cafe
Trial Balance
December 31, 2010
Cash
Account receivable
Supplies
Prepaid rent
Prepaid Insurance
Equipment
Accumulated depreciation- equipment
Account payable
Unearned internet fees
Common stock
Retained earnings
Dividends
Internet fees
Wage expenses
Rent expenses
Utility expenses
Total
Debit (RM)
1,300
700
200
400
600
9,100
Credit (RM)
400
500
900
1,500
1,000
8,000
22,700
3,500
2,000
1,200
RM 27,000
RM 27,000
The following information is available to assist in the preparation of adjusting
entries:
a. An inventory of supplies reveals RM100 still on hand.
b. Prepaid insurance consists of a two-year policy purchased on July 1, 2010.
c. Depreciation on equipment is estimated to be RM 500.
d. Accrued wages are RM100 on December 31.
DFA 5058 (Financial Accounting)/Chapter 4
e. Accrued utility expenses RM 300.
f. One-third of the unearned internet fees have been earned by December 31.
g. Management estimates income taxes for the year to be RM 2,500.
Instructions
a) Prepare the adjusting entries.
b) Prepare the adjusted trial balance.
Answer 3
Team Cafe
General Journal
Date
Account Titles and Explanation
Ref
Dec 31 Supplies Expense
Supplies
Insurance Expense
Prepaid Insurance
Depreciation Expense – Equipment
Accumulated Depreciation – Equipment
Wages Expense
Wages Payable
Utilities Expense
Utilities Payable
Unearned Internet Fee
Internet Fee Revenue
Income Taxes Expense
Income Taxes Payable
Debit
100
Credit
100
150
150
500
500
100
100
300
300
300
300
2,500
2,500
Team Cafe
Trial balance
December 31,2010
Cash
Account receivable
Supplies
Prepaid insurance
Prepaid rent
Equipment
Accumulated. Depreciation - Equipment
Account Payable
Income taxes payable
Unearned internet fees
Wages payable
Utility payable
Common stock
Retained earnings
Dividends
Internet fees revenue
DEBIT (RM)
1,300
700
100
450
400
9,100
CREDIT (RM)
900
500
2,500
600
100
300
1,500
1,000
8,000
23,000
DFA 5058 (Financial Accounting)/Chapter 4
Wages expense
Income taxes expense
Rent expense
Utility expense
Depreciation expense
Insurance expense
Supplies expense
3,600
2,500
2,000
1,500
500
150
100
RM 30,400
RM 30,400
Question 4
Lina Rig started her own consulting firm, Excellent Consulting, on May 1, 2011. The
trial balance at May 31 is as follows.
Excellent Consulting
Trial Balance
31 May 2011
Debit (RM)
7,700
4,000
1,500
2,400
12,000
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Office Furniture
Accounts Payable
Unearned Service Revenue
Lina, Capital
Service Revenue
Salaries Expense
Rent Expense
Credit (RM)
3,500
3,000
19,100
6,000
3,000
1,000
RM 31,600
RM 31,600
Other data
1. RM500 of supplies have been used during the month.
2. Travel expense incurred but not paid on May 31, 2010, RM200.
3. The insurance policy is for 2 years.
4. RM1,000 of the balance in the unearned service revenue account remains
unearned at the end of the month.
5. Accrued salary expenses at 31 May, RM500.
6. The office furniture is being depreciated at RM200 per month for 60 months.
7. Invoices representing RM1,000 of services performed during the month have not
been recorded as of May 31.
Instructions
a) Prepare the adjusting entries for the month of May.
b) Post the adjusting entries to the ledger accounts. Enter the totals from the
trial balance as beginning account balances.
c) Prepare an adjusted trial balance at 31 May 2011.
Answer 4
Excellent Consulting
DFA 5058 (Financial Accounting)/Chapter 4
General Journal
Date
Account Titles and Explanation
May 31 Supplies Expense
Supplies
Travel Expense
Travel Payable
Insurance Expense (2,400/24)
Prepaid Insurance
Unearned Service Revenue (3,000 – 1,000)
Service Revenue
Salaries Expense
Salaries Payable
Depreciation Expense – Office Furniture
Acc. Depreciation – Office Furniture
Accounts Receivable
Service Revenue
(b)
May 31 Balance b/f
Jun 1 Balance b/f
May 31 Balance b/f
Service Revenue
Jun 1 Balance b/f
May 31 Balance b/f
Jun 1 Balance b/f
May 31 Balance b/f
Jun 1 Balance b/f
May 31 Balance b/f
Ref
Debit
500
500
200
200
100
100
2,000
2,000
500
500
200
200
1,000
Cash
7,700 May 31 Balance c/f
7,700
7,700
Accounts Receivable
4,000 May 31 Balance c/f
1,000
5,000
5,000
Supplies
1,500 May 31
Supplies Expense
Balance c/f
1,500
1,000
Prepaid Insurance
2,400 May 31 Insurance Expense
Balance c/f
2,400
2,300
Office Furniture
12,000 May 31 Balance c/f
Credit
1,000
7,700
7,700
5,000
5,000
500
1,000
1,500
100
2,300
2,400
12,000
DFA 5058 (Financial Accounting)/Chapter 4
Jun 1 Balance b/f
12,000
12,000
Accumulated Depreciation – Office Furniture
May 31 Balance c/f
200 May 31 Dep. Exp – Off Furniture
200
Jun 1 Balance b/f
Accounts Payable
May 31 Balance c/f
3,500 May 31 Balance b/f
3,500
Jun 1 Balance b/f
May 31 Service Revenue
Balance c/f
May 31 Balance c/f
May 31 Balance c/f
May 31 Balance c/f
May 31 Balance c/f
May 31 Balance b/f
Unearned Service Revenue
2,000 May 31 Balance b/f
1,000
3,000
Jun 1 Balance b/f
12,000
200
200
200
3,500
3,500
3,500
3,000
3,000
1,000
Salaries Payable
500 May 31 Salaries Expense
500
Jun 1 Balance b/f
500
500
500
Travel Payable
200 May 31 Travel Expense
200
Jun 1 Balance b/f
200
200
200
Lina, Capital
19,100 May 31 Balance b/f
19,100
Jun 1 Balance b/f
19,100
19,100
19,100
Service Revenue
9,000 May 31 Balance b/f
Unearned Revenue
Accounts Receivable
9,000
Jun 1 Balance b/f
6,000
2,000
1,000
9,000
9,000
Salaries Expense
3,000 May 31 Balance c/f
3,500
DFA 5058 (Financial Accounting)/Chapter 4
Salaries Payable
Jun 1 Balance b/f
May 31 Balance b/f
Jun 1 Balance b/f
500
3,500
3,600
3,500
Rent Expense
1,000 May 31 Balance c/f
1,000
1,000
1,000
1,000
Supplies Expense
500 May 31 Balance c/f
500
500
500
500
Travel Expense
200 May 31 Balance c/f
200
200
200
200
Depreciation Expense – Office Furniture
May 31 Acc Depn –Off Furniture
200 May 31 Balance c/f
200
Jun 1 Balance b/f
200
200
200
Insurance Expense
100 May 31 Balance c/f
100
100
100
100
May 31 Supplies
Jun 1 Balance b/f
May 31 Travel Payable
Jun 1 Balance b/f
May 31 Prepaid Insurance
Jun 1 Balance b/f
(c)
Excellent Consulting
Adjusted Trial Balance
31 May 2011
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Office Furniture
Accumulated Depreciation – Office Furniture
Accounts Payable
Unearned Service Revenue
Travel Payable
Salaries Payable
L.Rig, Capital
Debit (RM)
7,700
5,000
1,000
2,300
12,000
Credit (RM)
200
3,500
1,000
200
500
19,100
DFA 5058 (Financial Accounting)/Chapter 4
Service Revenue
Salaries Expense
Rent Expense
Supplies Expense
Depreciation Expense – Office Furniture
Travel Expense
Insurance Expense
9,000
3,500
1,000
500
200
200
100
RM 33,500
RM 33,500
Question 5
Chiko Laundry‘s trial balance before adjustment on 30 June 2010 is as follows.
Chiko Laundry
Trial Balance
30 June 2010
Debit
Credit
RM
RM
Account Receivable
8,000
Cash
7,500
Supplies
9,000
Equipment
26,000
Accumulated Depreciation – Equipment
7,800
Prepaid Insurance
3,000
Account Payable
11,500
Unearned laundry revenue
8,000
Capital
10,000
Drawing
1,500
Laundry Revenue
31,200
Salary Expenses
2,000
Utility Expenses
2,500
Rent Expenses
5,500
Interest Expenses
1,700
Maintenance Expenses
800
RM 68,500
RM 68,500
Additional transactions :
1. RM1,000 of supplies has been used during the period.
2. Depreciation of equipment for period is RM700.
3. Salaries of RM2,000 are accrued at 31 June 2010.
4. Unearned laundry revenue of RM2,000 has been earned.
5. Prepaid insurance expired for the month is RM250.
6. Utilities expenses of RM300 are accrued at 30 June 2010.
Instructions
(a) Journalize the adjusting entries.
(b) Prepare an adjusted trial balance for Chiko Laundry Service.
(c) Prepare the income statement for Chiko laundry Service.
Answer 5
(a)
Chiko Laundry
General Journal
DFA 5058 (Financial Accounting)/Chapter 4
Date
Account Titles and Explanation
June 30 Supplies Expense
Supplies
Depreciation Expense – Equipment
Acc. Depreciation – Equipment
Salaries Expense
Salaries Payable
Unearned laundry Revenue
Service Revenue
Insurance Expense
Prepaid Insurance
Utilities Expenses
Utilities Payable
Ref
Debit
1,000
Credit
1,000
700
700
2,000
2,000
2,000
2,000
250
250
300
300
(b)
Chiko Laundry
Trial Balance
30 June 2010
Cash
Account Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation – Equipment
Account Payable
Unearned laundry revenue
Salary Payable
Utilities Payable
Capital
Drawing
Laundry Revenue
Rent Expenses
Salary Expenses
Utility Expenses
Interest Expenses
Supplies Expenses
Maintenance Expenses
Depreciation Expenses -Equipment
Insurance Expenses
(c)
Chiko Laundry
Income Statement
Debit
RM
7,500
8,000
9,000
2,750
26,000
Credit
RM
8,500
11,500
6,000
2,000
300
10,000
1,500
33,200
5,500
4,000
2,800
1,700
1,000
800
700
250
RM 71,500
RM 71,500
DFA 5058 (Financial Accounting)/Chapter 4
For the month ended 30 June 2010
RM
Revenue
Laundry Revenue
Expenses
Rent Expense
Salary Expense
Utility Expense
Interest Expense
Supplies Expense
Maintenance Expense
Depreciation Expense -Equipment
Insurance Expense
Total Expenses
Net Income
RM
33,200
5,500
4,000
2,800
1,700
1,000
800
700
250
(16,750)
RM 16,450
Question 6
Chenta Resort opened for business on 1 September 2010. Its trial balance before
adjustment on September 30 is as follows:Chenta Resort
Trial Balance
30 September 2010
Cash
Supplies
Prepaid Insurance
Account Receivable
Land
Buildings
Furniture
Accounts Payable
Unearned Rent Revenue
Mortgage Payable
Amani, Capital
Amani, Drawing
Rent Revenue
Repair Expense
Salaries Expense
Utilities Expense
Debit (RM)
15,600
3,300
6,000
4,000
25,000
125,000
26,000
Credit (RM)
6,500
7,400
80,000
100,000
5,000
80,000
3,600
51,000
9,400
RM 273,900
RM 273,900
Other data
1. Insurance expires at the rate of RM400 per month.
2. A count on September 30 shows RM600 of supplies still on hand.
3. Monthly depreciation is RM500 on buildings and RM200 on furniture.
4. Unearned rent revenue of RM4,200 was earned prior to September 30
5. Salaries of RM400 were unpaid at September 30.
DFA 5058 (Financial Accounting)/Chapter 4
6. Rentals of RM1,000 were due from tenants at September 30.
Instructions
(a) Journalize the adjusting entries on September 30.
explanation.
(b) Prepare an adjusted trial balance on September 30.
You may omit the
Answer 6
Chenta Resort
General Journal
Date
Account Titles and Explanation
Sept 30 Insurance Expense
Prepaid Insurance
Supplies Expense (3,300 – 600)
Supplies
Depreciation Expense – Buildings
Depreciation Expense – Furniture
Acc. Depn.– Buildings
Acc. Depn. – Furniture
Unearned Rent Revenue
Rent Revenue
Salaries Expense
Salaries Payable
Accounts Receivable
Rent Revenue
Ref
Debit
400
Credit
400
2,700
2,700
500
200
500
200
4,200
4,200
400
400
1,000
1,000
Chenta Resort
Adjusted Trial Balance
31 August 2010
Cash
Account Receivable
Supplies
Prepaid Insurance
Land
Buildings
Less: Accumulated Depreciation – Buildings
Furniture
Less: Accumulated Depreciation – Furniture
Accounts Payable
Unearned Rent Revenue
Salaries Payable
Mortgage Payable
Amani, Capital
Amani, Drawing
Rent Revenue
Salaries Expense
Utilities Expense
Debit (RM)
15,600
5,000
600
5,600
25,000
125,000
Credit (RM)
500
26,000
200
6,500
3,200
400
80,000
100,000
5,000
85,200
51,400
9,400
DFA 5058 (Financial Accounting)/Chapter 4
Repair Expense
Supplies Expense
Depreciation Expense – Buildings
Insurance Expense
Depreciation Expense – Furniture
3,600
2,700
500
400
200
RM 276,000
RM 276,000