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    student07's Avatar
    student07 Posts: 6, Reputation: 1
    New Member
     
    #1

    Jan 21, 2007, 06:03 PM
    Adjusting Journal Entry-Please help
    I attempted to do this problem & I am not sure whether it is correct or not.Please help.
    Question is as follows.

    Balance Sheet as of dec 31 2002
    Assets
    Cash 24$
    A/c Rec. 15
    Supplies 6
    Prep. Insurance12
    Equipment 50
    Less: Acc. Dep(12) 38
    Land 10
    Total 105$

    Liabilitioes+SE
    A/c Payable $4
    Interest Payable $3
    Unearned Revenue 12
    Other short-term payable 4
    Long-term payable 50
    Common stock 20
    RE 12
    Total $105

    Transactions during 2003

    1.Wages paID 5$
    2.Purchased equipment for 5$
    3.Collected cash 10$ from customers for wrk previusly performed & billed
    4.Purchased 2$ of supplies for cASH
    5.Paid 3$ to a vendr for supplies previously purchased on credit in dec 2002.
    6.Paid the interest owed as of dec 31,2003.
    7.Completed 18$ in services for customers , receiving 50% payment in cash & billing the remainder.
    8.Paid 15$ to reduce outstanding notes payable.
    9.Collected 5$ for issuance of common stock.
    14.Declared & paid cash on dividend in amount of 50% of net income


    Adjusting Journal entries
    10.had performed 25% of the services for which it had been paid in advance.
    11.Owes 1$ for interest that will be paid next month
    12.Depreciated equipment in the amount of 4$
    13.pHYSICAL COUNT F SUPPLIES IN HAND REVEAL 3$ ON HAND
    A
    Prepare Journal Entries & Adjusting Journal entries?

    1 Wage Expense 5
    Cash 5

    2 Equipment 5
    Cash 5

    3 Cash 10
    Service Revenue 10

    4 Supplies Inventory 2
    Cash 2

    5 Accounts Payable 3
    Cash 3

    6 Interest Expense 3
    Interest Payable 3

    7 Cash 18
    Service Revenue 9
    Accounts Receivable 9

    8 Long-term note payable 15
    Cash 15

    9 Cash 5
    Common Stock 5

    14 Dividend
    Cash
    Not sure how to calculate this

    Adjusting Journal Entries


    10 10 Unearned Revenue 3
    Fees Earned 3

    11 Interest Expense 1
    Interest Payable 1

    12 Depreciation Expense 4
    Accumulated Depreciation 4

    13 Supplies Expense 5
    Supplies Inventory 5



    Am I doing it correct here?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jan 22, 2007, 11:14 PM
    1 and 2 good job

    3:
    Dr. Cash 10
    Cr. AR 10
    If it has already been billed, the revenue has already been recorded.

    4 5 good job

    6:
    Confused a bit here.
    I see $3 of interest payable on your balance sheet, are you just now paying that?

    If so,
    Dr. Interest Payable 3
    Cr. Cash 3

    7:
    Dr. Cash 9
    Dr. AR 9
    Cr. Service Revenue 18

    You made $18 in sales. You got half in cash $9, and the other half in AR (still owed)

    8 9 good

    14 can't do that just yet. First need to do adjusting entries to calculate net income.

    10 correct, except you should probably stick to one common revenue name.

    Earlier you called it Service Revenue, here you call it Fees Earned

    11 13 good

    Before we do 14, we must calculate Net Income:

    Revenues
    (7) Cr. Service Revenue 18
    (10) Fees Earned 3
    Total Revenue = 21

    Expenses
    (1) Wage Expense 5
    (11) Interest Expense 1
    (12) Depreciation Expense 4
    (13) Supplies Expense 5
    Total Expenses = 15

    Net Income = 6

    Now we can do 14.

    14.Declared & paid cash on dividend in amount of 50% of net income

    Dr. Dividends 3
    Cr. Cash 3

    Are you expected to do Closing entries as well?
    Dr. Retained Earnings 3
    Cr. Dividends 3

    Plus closing your revenue and expense accounts.
    student07's Avatar
    student07 Posts: 6, Reputation: 1
    New Member
     
    #3

    Jan 23, 2007, 12:30 PM
    Thank you for the prompt response :-)
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member
     
    #4

    Jan 23, 2007, 10:44 PM
    You're welcome

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