[imarpan]

Need the adjusting journal entries of the following. Please ASAP.

a. Supplies used during the year, $2,580. (B/S - Supplies 3930)
b. Prepaid rent for store premises in force, $1000. (B/S - Rent for store - 5000)
c. Unearned sales revenue still not earned $2,400. The business expects to earn this amount during the next few months.

d. Accrued salaries – sales staff, $1300.
e. Accrued interest expense, $600.
f. Inventory on hand, $65,800. (B/S - Inventory - 60500)

[ROLCAM]

Please you must learn , have a go , at doing your own entries.
Try!
We shall correct them for you.
Do not forget the NARRATION.

[imarpan]

a)
Dr Supplies Expenses 2580
Cr Supplies 2580
To record supplies used

b)
Dr Rent Expenses 1000
Cr Prepaid Store Rent 1000
To record prepaid store rent

c)
Dr Accounts Receivable 2400
Cr Service Revenue 2400
To record unearned revenue due


d)
Dr Salaries Expenses 1300
Cr Salaries Payable 1300
To record accrued salary - sales staff

e)
Dr. Interest Expenses 600
Cr Interest Payable 600
To accrue interest on bank loan

f)
Op Inv = 60500 + Purchase 175900 - Cl inven 65800 = COGS
Dr a/c payable 170600
cr cogs 170600


Please correct me if I am wrong please.

THanks

[morgaine300]

b)
Dr Rent Expenses 1000
Cr Prepaid Store Rent 1000
To record prepaid store rent

They're not telling you that $1000 has expired and therefore must be expensed. They're telling you that the current amount of prepaid rent is $1000. That means the amount that must stay in the account. If it's prepaid, that makes it still an asset. If $1000 is still an asset, still prepaid (for the future), then how much of it actually expired?

c)
Dr Accounts Receivable 2400
Cr Service Revenue 2400
To record unearned revenue due

You're making an assumption that this is accrued revenues. That isn't what it says. It says the amount that is UNEARNED as of this date is $2400. Unearned revenue is a liability. It's a deferral (just like #1 & 2). Deferrals are things that have been paid in advanced. If someone pays you in advance for services, then you "owe" them the service. Unearned's are liabilities. There's no receivable because they don't owe you anything -- they've already paid in advance.

As for figuring the dollar amount, it works like #2. They're giving you what is unearned as of that date, meaning that is the amount that is still due (in work) to the customer in the future months. So that's the balance you must let remain in the unearned account. The difference was earned.

f)
Op Inv = 60500 + Purchase 175900 - Cl inven 65800 = COGS
Dr a/c payable 170600
cr cogs 170600

How did the payable get into that? Counting your ending inventory doesn't change how much you do or do not owe to someone else. You can only do something to payables if the balance you owe changes. That entry also will not get your new inventory balance into the inventory account.

If this is a periodic method, you cannot handle this like this. Net purchases plus/minus the difference in inventory will be cost of goods sold. The difficulty is that if you make an entry to COGS, you'll have to deal with both the change in inventory and wiping out your purchases, returns, discounts and transportation accounts all at once. While that can be done, I've never seen it done that way.

There's a difference between the math to make something work out, and making entries. Normally this is taken care of by crediting out the old inventory, debiting in the new, and the other side of those is like Income Summary (what I've seen called P&L Account other places). What you're recording in essence is the difference in inventory. That difference, combined with net purchases, is COGS. But I've not seen the entire thing done as an entry. COGS can be calculating on the income statement -- you don't need an entry for it.

Or... you are doing perpetual and mixing up the two adjusting entries. For perpetual, you would simply debit the difference to get the inventory to current and credit the COGS as the account to run that through.

But I don't know what method you're even doing. Regardless, somewhere you have to get that ending inventory balance in there.