Describe difference between adjusting and closing entries

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Reference no: EM131518891

Question: 1. Describe the difference between adjusting entries and closing entries.

2 Given the following information for Dunedin's CityCentre Hotel, post relevant adjusting entries to CityCentre's general ledger. Assume 30 June is the year-end.

(a) The telephone account of $500 for June is unpaid and unrecorded.

(b) Rent of $3,600 for the six-month period ending 31 August is due to be paid in arrears in October.

(c) It was estimated at the time of purchasing a car two years ago for $6,000 that the car would be salvaged five years later for $1,000. The company uses straight line depreciation for all fixed assets. This year's depreciation entry for the car is still to be made.

(d) The next fortnightly pay date for the company's employees is 7 July. The fortnightly payroll is $140,000.

(e) On 2 March received $1,600 cash from a client. This was an advance payment for services to be rendered. At the time of receipt, $1,600 was recorded as a credit to unearned revenue. On 30 June 75% of this service had been provided.

(f) On 1 May received six month's rent revenue in advance totalling $600. At the time of the receipt, this was recorded as a credit to rental revenue.

Reference no: EM131518891

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