ACCOUNTING 30S WORKSHEET ON ADJUSTING ENTRIES
Put on your thinking caps and sharpen your pencils boys and girls—it's time to practice
with adjusting entries!
1.
G i v e in general journal f o r m the year-end adjusting entry f o r each o f the
following:
a.
The Prepaid Insurance account had a $985 debit balance at the end o f the
accounting period before adjustment f o r expired insurance. A n examination o f insurance policies showed that $540 o f insurance had expired.
IK T h e Prepaid Insurance account had an $890 debit balance at the end o f the
accounting period before adjustment f o r expired insurance. A n examination o f insurance policies showed $270 o f unexpired insurance.
c. The store supplies account had a $215 debit balance on January I ; store
supplies costing $580 were purchased d u r i n g the year, and a year-end
inventory showed $235 o f unconsumed store supplies o n hand.
d. Four months' property taxes, estimated at $445, have accrued but are
unpaid and unrecorded at the accounting period end.
c.
Depreciation on store equipment f o r the accounting period is estimated
at 52,775.
A company paid the $1,800 premium on a three-year insurance policy on
August 1, 1980.
a.
H o w m a n y dollars o f the p r e m i u m s h o u l d appear o n the 1980 i n c o m e
statement as an expense?
b.
H o w m a n y dollars o f the p r e m i u m s h o u l d appear o n the December
31, 1980, balance sheet as an asset?
c
U n d e r the assumption that the P r e p a i d I n s u r a n c e account was debited
f o r S 1,800 i n r e c o r d i n g the p r e m i u m p a y m e n t , give the December
31. 1980, a d j u s t i n g entry to record the e x p i r e d insurance.
U n d e r the assumption the bookkeeper i n c o r r e c t l y debited the Insurance Expense account f o r $1,800 i n r e c o r d i n g the p r e m i u m payment
y e the December 3 1 , 1980. a d j u s t i n g e n t r y . ( H i n t : D i d the bookkeeper s e r r o r change the answers t o questions ( a ) a n d (6) o f this exercise?)
d.
g l
Determine the amounts indicated by the question marks in the columns below. T h e amounts in each column constitute a separate problem.
(a)
$213
Supplies purchased during the year.... 475
Supplies consumed during the year....
7
Supplies remaining at the year-end . . . . 238
(b)
(c)
id)
$142
537
462
0
$325
n
$ ?
622
254
452
395
204
O n December 3 1 , at the end o f a yearly accounting period, the following information f o r adjustments was available:
a.
T h e prepaid insurance account showed these amounts:
Prepaid Insurance
Jan.
May
Nov.
I
I
I
Balance
65.00.
210.00
270.00
T h e January 1 balance represents the unexpired premium on a one-year
policy purchased on M a y 1 o f the previous year. The M a y I debit resulted
f r o m paying the premium o n a one-year policy, and the November I debit
represents the cost o f a three-year policy.
The office supplies account showed these amounts:
b.
Office Supplies
Jan.
I
Mar. 10
Oct.
5
Balance
Purchase
Purchase
115.00
155.00
60.00
T h e December 31 year-end inventory o f office supplies showed $95 o f
^ unused supplies.
Cyf T h e company owns and occupies a building that was completed and occupied f o r the first time on A p r i l 1 o f the current year. T h e company had
previously occupied rented quarters. The building cost $192,000, has an
estimated 40-year useful life, and is not expected to have any salvage
value at the end o f its life.
d. T h e company rents portions o f the space in its building to two tenants.
Tenant A agreed beginning on September 1 to rent a small amount o f
space at $100 per month, and on that date paid six months* rent in advance. T h e $600 was credited to the Unearned Rent account.
e. Tenant B pays $ 150 rent per month on the space he occupies. During the
months o f June through N o v e m b e r he paid his rent each month on the first
day o f the month, and the amounts paid were credited to Rent Earned.
However, he has recently experienced financial difficulties and has not yet
paid his rent f o r December.
/
T h e company has t w o office employees w h o earn $24 and $36 per day,
respectively. T h e y are paid each Friday f o r a workweek that begins o n
Monday. T h e y were paid last Friday and have w o r k e d on M o n d a y and
Tuesday, December 30 and 31 o f this week.
x
Required:
Prepare adjusting j o u r n a l entries f o r each o f the units o f information.
f
^d^t^TT
° .*
end of its annual accounting
C h
V r 0 n
M
o
v
i
n
S t o r a
«
« « Company's ledger at the
period carried these items:
CHEVRON M O V I N G A N D S T O R A G E C O M P A N Y
Trial Balance, December 3 1 , 1 9 —
Cash
$ 2A60
Accounts receivable.
680
Prepaid insurance
1340
Office supplies
210.
Office equipment
1.540
Accumulated depreciation, office equipment....
Trucks.
13300
Accumulated depreciation, trucks.
Buildings.
~
38,300
Accumulated depreciation, buildings
Land
8.000
Accounts payable
Unearned storage fees
Mortgage payable
Ted Davis, capital
Ted Davis, withdrawals
8.400
Revenue from moving services
Storage fees earned
Office salaries expense
5,200
Truck drivers* wages expense
18*410
G a s , oil, and repairs expeose
+.
1,515
Totals
$99,855
$
320
2,630
10,900
875
685
20,000
18*490
42,995
2,960
$99355
Required:
1.
2.
Open the accounts of the trial balance and these additional accounts:
Wages Payable; Insurance Expense; Office Supplies Expense; Depreciation Expense, Office Equipment; Depreciation Expense, Trucks; and Depreciation Expense, Buildings. Enter the trial balance amounts in the accounts.
U s e this information to prepare and post adjusting journal entries:
a. A n examination of insurance policies showed $915 of insurance expired.
b. A n office supply inventory showed $55 of unused office supplies on
hand at the period end.
c. Estimated depreciation of office equipment, $ 130; (d) trucks, $2,875;
and (?) buildings. $2,100.
/ . T h e company crediu the storage fees of customers who pay in advance to the Unearned Storage Fees account O f the $685 credited
to this account during the year. $385 had been earned by the year-end.
g.
Accrued storage fees earned but unrecorded in the accounts and uncollected at the year-end totaled $ 140.
h. There were $285 of earned but unpaid truck drivers' wages at the yearend.
Prepared by Mrs. J Kroeker
Accounting Systems AOS
(
1. Bobby's books had prepaid insurance at the beginning of the year in
the amount of $550. At the end of the year $100 of this insurance
had expired. Calculate the adjusting journal entry at the year end.
2. Mind Your Own Business rents office space in a downtown building. A
cheque for $1 200 was issued to the landlord, City Realty, for three
months office rent on December 1. Record the adjusting entry at
December 31.
3. Apple's and Orange's Grocery Store advertises in the local newspaper.
They pay the newspaper the total advertising amount for the whole
year at the beginning of the year (January 1) in the amount of
$1 975.00. (therefore, this amount is for 12 months). Calculate the
adjusting entry and the closing entry required after 3 months.
4. O f f i c e supplies on hand at Jane's Grocery amounted to $ 6 9 5 at the
beginning of the year. At the end of the year, a physical inventory
count was taken and it showed that office supplies on hand amounted
to $470. Prepare the adjusting entry to record supplies expense
required
at the end of the year.
Prepared by Mrs. J Kroeker
Accounting Systems 4 0 S
5. The fiscal year for Montreal Distributors ends December 31. The
supplies on hand at the beginning of the year amounted to $ 5 230.
During the year, the president decides that the company must make
cutbacks. Supplies were no longer allowed to be purchased. At
December 31, the supplies on hand were $535.00. Prepare the
adjusting entry.
\
6. At the beginning of their fiscal year, April 1, 2001, Ray's Piano had
only $125.00 of office supplies. Since all of their customers want to
take home their new piano pencils, Ray decided to purchase 200 cases
on April 4, 2001. This amounted to $ 9 565. A t the yearend, March 30,
2002, Ray had $ 5 120 of office supplies on hand. What is the
necessary adjusting entry?
7. The supplies account at Murphy's Mops Cleaning Business had a
balance of $ 7 0 0 at the beginning of the fiscal period. At the end of
the fiscal period, an inventory shows supplies on hand worth $100.
a) What was the value of supplies used during the fiscal period?
b) What is the supplies expense for the fiscal period?
c) What should the balance be in the supplies account at the end of the
fiscal period?
Prepared by Mrs. J Kroeker
Accounting Systems 40S
d) Prepare the adjusting entry to record the supplies used.
*
8. Charlie's Meat Market has hired you as their accountant Prepare the
adjusting entries f o r the month of January for the following:
a) Balance of supplies account on January 1: $700.00. Supplies on hand
on January 31: $ 2 5 0 (show your work).
b) Rent was paid for three months on January 1, $ 2 400 (show your
work)
c) A 12 month insurance
(show your work)
policy was purchased on January 15 for $ 1 2 0 0 .