Hand out 4 solution

Hand out 4 solution - HANDOUT 4 1 SOLUTION ADJUSTING...

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HANDOUT 4 – 1 SOLUTION ADJUSTING ENTRIES AND POSTING TO T-ACCOUNTS Prepare the required adjusting journal entry for each situation as of December 31, 2008. See the last page for the unadjusted account balances shown in T-accounts. (a) Suppose Deana’s had received a $1,800 shipment of supplies in September 2008. When counting the supplies on December 31, 2008, Deana’s found only $800 worth of supplies on hand. Debit and credit the accounts affected. Dec. 31 dr Supplies Expense (+E, -SE) 1,000 2008 cr Supplies (- A) 1,000 Ensure the equation still balances and debits = credits. Assets = Liabilities + Stockholders’ Equity Supplies (-A) -1,000 Supplies Exp. (+E) -1,000
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(b) Suppose Deana’s had paid $12,000 for six months’ rent on November 1, 2008. As of December, 31, 2008, two months’ (November & December) prepaid rent has expired. Debit and credit the accounts affected. Dec. 31 dr Rent Expense (+E, -SE) 4,000 2008 cr Prepaid Rent (-A) 4,000 Ensure the equation still balances and debits = credits. Assets = Liabilities + Stockholders’ Equity Prepaid Rent (-A) -4,000 Rent Exp. (+E) -4,000 (c) Suppose Deana’s had paid $6,000 for one year’s insurance on June 1, 2008. Debit and credit the accounts affected.
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Dec. 31 dr Insurance Expense (+E, -SE) 3,500 2008 cr Prepaid Insurance (- A) 3,500 Ensure the equation still balances and debits = credits. Assets = Liabilities + Stockholders’ Equity Prepaid Insurance (-A) -3,500 Insurance Exp. (+E) -3,500
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(d) The company had acquired Property, Plant & Equipment costing $40,000 on January 1, 2008. Suppose that the depreciation on this Equipment was calculated to be $2,000 for 2008. Debit and credit the accounts affected. Dec. 31 dr Depreciatio n Expense (+E, -SE) 2,000 2008 cr Accumulate d Depreciatio n (-A) 2,000 Ensure the equation still balances and debits = credits. Assets
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This note was uploaded on 08/30/2011 for the course ACIS 2116 taught by Professor Cmeasterwood during the Spring '08 term at Virginia Tech.

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Hand out 4 solution - HANDOUT 4 1 SOLUTION ADJUSTING...

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