Chapter 4 Homework Problems
E4-6 Recording Seven Typical Adjusting Entries LO2
SportLand is completing the accounting process for the year just ended, December 31,
2007. The transactions during 2007 have been journalized and posted. The following
data with respect to adjusting entries are available in requirement 1:
1. Identify each of these transactions as a deferred revenue, deferred expense,
accrued revenue, or accrued expense.
2. Using the process illustrated in the chapter, for each situation record the
adjusting entry that should be recorded for Heald’s at December 31, 2007.
a. Office supplies on hand at January 1, 2007, was $250. Office supplies
purchased and debited to Office Supplies during the year amounted to
$600. The year-end count showed $250 of supplies on hand.
b. Wages earned by employees during December 2007, unpaid and
unrecorded at December 31, 2007, amounted to $3,600. The last payroll
was December 28; the next payroll will be January 6, 2004.
c. Three-fourths of the basement of the store is rented for $1,400 per month
to another merchant, Klondike Shoes and Sandals. Klondike Shoes and
Sandals sells compatible, but not competitive, merchandise. On
November 1, 2007, the store collected six months' rent in the amount of
$8,400 in advance from Klondike Shoes and Sandals; it was credited in
full to Unearned Rent Revenue when collected.
d. The remaining basement space is rented to Frothing & Sandalwood for
$420 per month, payable monthly. On December 31, 2007, the rent for
November and December 2007 had not been collected or recorded.
Collection is expected January 10, 2004.