Create the adjusting entries using good form

Assignment Help Financial Accounting

Reference no: EM1374193

Below is a Trial Balance as of July 31, XX, for Les Cash, and his wife Mora. Together they own and operate the Cash Inn. Evaluate which of the accounts would need adjustment ( i.e. an adjusting entry) at the end of the current one month period for the Cash Inn. Do not attempt to evaluate the amount of the adjustment, but DO specific the accounts in a General Journal entry that would be needed by the adjustment. Include the proper measurement date in creating the entry.

Account Dr. Cr.
Cash $1048
Billings 460
Supplies 840
Prepaid Insurance 1200
Building 140000
Accumulated Depreciation-Building 20000
Land 1000
A/P 410
Salary Payable 600
Prepaid reservations 3300
Note Payable 15yr 102000
Les and Mora Cash Capital 6519
Lodging Fees 16540
Utility Expense 621
Salary Expense 4200
Totals 149369 149369

2. Create the adjusting entries using good form for each of the subsequent situations as of January 31 (measurement date) for the one month of January

a. Purchase a one-year insurance policy on January 2 for $3,600

b. On January 1, the supplies account shown an $800 balance. On January 31, a physical inspection reveals $200 on hand

c. Equipment was purchased last October 1 for a cost of $10,000. It is estimated to have a 5 year useful life and a $500 residual value. Evaluate what is the depreciation adjusting entry for January?

d. A customer had prepaid $800 for future services last September 10. At January 31, all but $200 of the work has been performed in January.

e. Made arrangements with the local paper to run an ad each Wednesday for $150 each. There are four Wednesdays in January. At 31st January, the bill had not yet been received. All accruals are done once a month.

f. As per a contract we have finished performance on a service agreement for a client in the amount of $200. As a January 31, the client had not yet been billed.

3. Classify the subsequent items as:
a) prepaid deferral expense
b) Prepaid deferral revenue
c) Accrual expense
d) Accrual revenue

In your answer you must describe why you choose a particular option to receive credit for your answer.

1. Utilities owned but not paid

2. Fees received, but not yet earned.

3. Subscriptions received in advance by a magazine publisher.

4. Supplies on hand.

5. Insurance paid for one year in advance

6. Employees have worked, but not yet been paid.

7. Fees earned but not yet received

8. Explain why was cash not involved in any of the above situations?

Reference no: EM1374193

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