Adjusting Entries and Posting to T-Accounts
Essay by Mesher2018 • December 9, 2018 • Coursework • 765 Words (4 Pages) • 736 Views
Hult International Business School – Group Evening Assignment 2A
(“Adjusting Entries, Closing & Financial Statements”)
Course: EMBA Accounting London
Lecturer:
Date:
Total: 60 points Team:
Part 1 - ADJUSTING ENTRIES AND POSTING TO T-ACCOUNTS
If needed, prepare the required adjusting journal entry for each situation as of December 31, 2017 and post them to T- accounts provided. (See the last page for the unadjusted account balances shown in T-accounts.)
Example. | ||||||||
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(a) Suppose Dana’s had received a $1,800 shipment of supplies in September 2017. When counting the supplies on December 31, 2017, Dana’s found only $800 worth of supplies on hand. (2 points)
Debit and credit the accounts affected. | ||||||||
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(b) Suppose Dana’s had paid $12,000 for six months’ rent on November 1, 2017. (2 points)
Debit and credit the accounts affected. | ||||||||
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(c) Suppose Dana’s had paid $6,000 for one year’s insurance on June 1, 2017. (2 points)
Debit and credit the accounts affected. | ||||||||
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(d) The company had acquired Property, Plant & Equipment costing $40,000 on January 1, 2017. Suppose that the depreciation on this Equipment was calculated to be $2,000 for 2017. (2 points)
Debit and credit the accounts affected. | ||||||||
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(e) On December 1, 2017, the company had sold $500 in gift certificates for decorating services to a customer. On December 31, 2017, the accountant received an envelope containing $400 worth of redeemed gift certificates, not yet recorded in the company’s books. (2 points)
Debit and credit the accounts affected. | ||||||||
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(f) On June 30, 2017, the company invested $20,000 in a certificate of deposit that will yield (generate) 12% interest at the end of one year. (2 points)
Debit and credit the accounts affected. | ||||||||
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(g) The company borrowed money (a note payable) from the bank for $30,000 on January 1, 2017, due with all interest on June 30, 2018. The note payable requires 10% (annual) interest. (2 points)
Debit and credit the accounts affected. | ||||||||
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(h) The company calculated its income taxes as $26,110 for the year ended December 31, 2017. (2 points)
Debit and credit the accounts affected. | ||||||||
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(i) On December 15, 2017, the company declared a $750 dividend, payable January 15, 2018. (2 points)
Debit and credit the accounts affected. | ||||||||
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Un-adjusted starting balances are given. Post the adjusting entries above to the T-accounts on the following page. (12 points)
Assets | Liabilities | Stockholders’ Equity, continued | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
+ Cash –
+ Supplies –
+ Accounts Receivable –
+ Prepaid Rent –
+ Prepaid Insurance –
+ Certificate of Deposit –
+ Interest Receivable –
+ Property, Plant & Equipment –
– Accumulated Depr. +
| – Accounts Payable +
– Dividend Payable +
– Unearned Revenue +
– Notes Payable +
– Interest Payable +
– Income Tax Payable +
Stockholders’ Equity – Common Stock +
– Additional Paid-In
| – Retained Earnings +
– Decorating Revenue +
– Investment Income +
+ Wage Expense –
+ Utilities Expense –
+ Telephone Expense –
+ Supplies Expense –
+ Rent Expense –
+ Insurance Expense –
+ Depreciation Expense –
+ Interest Expense –
+ Income Tax Expense –
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Part 2 – ADJUSTED TRIAL BALANCE
Prepare the adjusted trial balance as of December 31, 2017. (10 points)
Dana’s Decorators
Adjusted Trial Balance
December 31, 2017
Debit | Credit | |
Cash | 43,450 | |
Supplies | 800 | |
Accounts Receivable | 4,000 | |
Prepaid Rent | 8,000 | |
Prepaid Insurance | 2,500 | |
Certificate of Deposit | 20,000 | |
Interest Receivable | 1,200 | |
Property, Plant & Equipment | 40,000 | |
Accumulated Depreciation | 2,000 | |
Accounts Payable | 250 | |
Dividend Payable | 750 | |
Unearned Revenue | 100 | |
Notes Payable | 30,000 | |
Interest Payable | 3,000 | |
Income Tax Payable | 26,110 | |
Common Stock ($1 par value) | 1,000 | |
Additional Paid-in Capital | 9,000 | |
Retained Earnings | 750 | |
Decorating Revenue | 120,400 | |
Investment Income | 1200 | |
Wage Expense | 32,000 | |
Utilities Expense | 1,000 | |
Telephone Expense | 500 | |
Supplies Expense | 1,000 | |
Rent Expense | 4,000 | |
Insurance Expense | 3,500 | |
Depreciation Expense | 2,000 | |
Interest Expense | 3,000 | |
Income Tax Expense | 26,110 | |
Totals | 193,810 | 193,810 |
Part 3 – INCOME STATEMENT & BALANCE SHEET
Prepare a classified Income Statement for the full year 2017 and a classified Balance Sheet as of December 31, 2017.
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