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    fortwife's Avatar
    fortwife Posts: 3, Reputation: 1
    New Member
     
    #1

    Sep 17, 2007, 10:07 AM
    adjusting journal entries
    PREPAID INSURANCE $450-DEBIT
    FILM ON HAND $250-DEBIT
    CAMERAS $20,000-DEBIT
    ACCUMULATED DEPRECIATION-CAMERAS $3,667- CREDIT.
    UNEARNED REVENUE $5700-CREDIT
    NOTE PAYABLE $3000-CREDIT
    SALARIES EXPENSE $2400-DEBIT.

    IM TO DO ADJUSTED TRAIL BALANCE AND IM NOT SURE WERE TO START OR WHAT
    TO DO WITH THE INFORMATION AVAILABLE BELOW:
    I'm not sure about the formate..

    The insurance policy was dated December 1; the monthly insurance cost
    is $50.

    Film on hand at December 31,200x7 was $180.

    The cameras were purchased on January 1,200x7. The estimated life is
    five years.

    The balance in unearned revenue is $2000

    Interest owed but not paid on the note was $30.

    Salaries owed but not paid at December 31 were $2000.

    I'm not sure how to start my entries.
    I have spent a lot of time trying to figure this out.. Your help will be
    greatly appreciated.

    Thanks
    fortwife
    4Melanie's Avatar
    4Melanie Posts: 7, Reputation: 2
    New Member
     
    #2

    Sep 17, 2007, 07:28 PM
    Looks like a photography business
    Known info:
    Balance sheet
    Assets Debits Credits
    Prepaid insurance $450
    Inventory film 250
    Equipment cameras 20000
    Accum. Depr. 3667

    Liabilities
    Deferred (Unearned) Revenue 5700
    Note Payable 3000

    Salary Expense 2400

    AJE #1 adjusting journal entry
    Insurance Exp 50
    Prepaid Insurance 50
    To adjust insurance to actual

    AJE#2
    Material Expense(250-180) 70
    Inventory 70
    To adjust inventory to actual

    AJE #3
    Depreciation exp( 20,000/5=4000/yr straight-line method)
    333
    Accum Depr 333
    To adjust Accum Depr to computed balance

    AJE #4
    Deferred (Unearned) Rev. 3700
    Revenue 3700
    To record revenue earned

    AJE#5
    Interest Expense 30
    Interest Payable 30
    To adjust interest payable to actual

    AJE#6
    Salary Expense 2000
    Salaries Payable 2000
    To adjust payables for salaries due note on this one I am assuming that this additional $2

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