Accounting, adjusting accounts

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CHAP 3

Brief Exercise 3-2

Moteki Company accumulates the following adjustment data at December 31. Indicate the type of adjustment (prepaid expenses, accrued revenues and so on), and the status of accounts before adjustment (overstated or understated). (Enter answers in alphabetical order.)

1.		Supplies of $100 are on hand.
2.		Services provided but not recorded total $900.
3.		Interest of $200 has accumulated on a note payable.
4.		Rent collected in advance totaling $650 has been earned.

Item	Type of Adjustment	Account Balances before Adjustment
1.


2.


3.


4.

Brief Exercise 3-7

The bookkeeper for Bradbury Company asks you to prepare the following accrued adjusting entries at December 31.

1.		Interest on notes payable of $400 is accrued.
2.		Services provided but not recorded total $1,900.
3.		Salaries earned by employees of $900 have not been recorded.

Use the following account titles: Service Revenue, Accounts Receivable, Interest Expense, Interest Payable, Salaries and Wages Expense, and Salaries and Wages Payable. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Dec. 31

2.	Dec. 31

3.	Dec. 31

List Of Accounts

Brief Exercise 3-7

Accounts Payable Accounts Receivable Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Advertising Expense Buildings Cash Depreciation Expense Dividends Equipment Insurance Expense Interest Expense Interest Payable Land Maintenance and Repairs Expense Mortgage Payable No Entry Notes Payable Owner's Capital Owner's Drawings Prepaid Advertising Prepaid Insurance Prepaid Rent Property Tax Expense Property Taxes Payable Rent Expense Rent Revenue Retained Earnings Salaries and Wages Expense Salaries and Wages Payable Sales Revenue Service Revenue Supplies Supplies Expense Ticket Revenue Unearned Rent Revenue Unearned Service Revenue Unearned Subscription Revenue Unearned Ticket Revenue Utilities Expense

Brief Exercise 3-8

The trial balance of Yewlett Company includes the following balance sheet accounts, which may require adjustment. For each account that requires adjustment, indicate the type of adjusting entry (prepaid expenses, unearned revenues, accrued revenues, and accrued expenses) and the related account in the adjusting entry.

Account		Type of Adjustment	Related Account
Accounts Receivable

Prepaid Insurance

Accumulated Depreciation—Equipment

Interest Payable

Unearned Service Revenue
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Exercise 3-6

Lei Company accumulates the following adjustment data at December 31.

1.		Services provided but not recorded total $1,000.
2.		Supplies of $300 have been used.
3.		Utility expenses of $225 are unpaid.
4.		Services related to Unearned service revenue of $260 were performed
5.		Salaries of $800 are unpaid.
6.		Prepaid insurance totaling $350 has expired.

For each of the above items indicate the following. (Enter answers in alphabetical order.)

(a)		The type of adjustment (prepaid expenses, unearned revenues, accrued revenues, or accrued expenses).
(b)		The status of accounts before adjustment (overstatement or understatement).

Item	Type of Adjustment	Accounts before Adjustment
1.


2.


3.


4.


5.


6.

Exercise 3-13

The trial balances before and after adjustment for Frinzi Company at the end of its fiscal year are presented below.

FRINZI COMPANY Trial Balance August 31, 2014
	Before Adjustment	After Adjustment
	Dr.	Cr.	Dr.	Cr.
Cash	$10,400		$10,400
Accounts Receivable	8,800		10,800
Supplies	2,300		900
Prepaid Insurance	4,000		2,500
Equipment	14,000		14,000
Accumulated Depreciation—Equipment		$ 3,600		$ 4,500
Accounts Payable		5,800		5,800
Salaries and Wages Payable		0		1,100
Unearned Rent Revenue		1,500		600
Owner’s Capital		15,600		15,600
Service Revenue		34,000		36,000
Rent Revenue		11,000		11,900
Salaries and Wages Expense	17,000		18,100
Supplies Expense	0		1,400
Rent Expense	15,000		15,000
Insurance Expense	0		1,500
Depreciation Expense	0		900
	$71,500	$71,500	$75,500	$75,500

Prepare the adjusting entries that were made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Aug. 31

	(To record accrued revenue)
Aug. 31

	(To record supplies used)
Aug. 31

	(To record expired insurance)
Aug. 31

	(To record depreciation)
Aug. 31

	(To record accrued salaries)
Aug. 31

	(To record rent earned)