[valmik]

My teacher has not really gone over this adjusting trial stuff. Actually is safe to say that she has not taught us anything. So can you please help me? I would it.


Unadjusted trial balance for Dec 31 2006
Cash $86000 (debit)
Accounts Receivable $17500 (debit)
Supplies $1900 (debit)
Prepaid Rent $2000 (debit)
Lawn Mower $9200 (debit)
Accounts Payable $18700(credit)
Unearned Revenue $10900(credit)
Longterm notes payable $12000 (credit)
Common Stock $30,400 (credit)
Retained Earnings $22,600 (credit)
Gardening Revenue $69,500 (credit)
Wages Expense $13,500 (debit)
Advertising Expense $8800 (debit)
Utilities Expense $3200 (debit)
Rent expense $22,000 (debit)
Total $164,100 (debit) & $164,100 (credit)


Additional info

Dec 31 determined that company earned $1250 in interest on our savings account during the year

Dec 31 company provided $4000 of gardening services during Dec 2006 that had been paid for in advance by their customer

Dec 31 The entire yrs rent ($2000 per month) was paid in advance on Jan 1 2006 (originally recorded in Jan consider the current balance in prepaid rent before posting this adjustment. It is possible that the company has made adjusting entries related to rent before Dec 31)

Dec 31 Determined that there were $700 left in supplies

Dec 31 Determined utilities are $800. The bill will be paid in January

Dec 31 The lawn mower needs to be depreciated for the year is $1800

Dec 31 The long term note payable was issued on August 1,2006. THe interest and the note are due on July 31 ,2009. The interest rate is 12%

Dec 31 Declared $3000 in dividends on Dec 31,2006. Amount well be paid Feb 28,2007

Dec 31 Calculate net income (after all your adjustments) and then record income taxes as 30% of net income. The taxes will be paid in March 2007

[morgaine300]

I understand that you feel lost and don't know where to begin, so I can understand if you can't actually submit any work, which is what you're supposed to do since it's your homework. However, there are nine different entries here. These entries are going to involve an entire chapter's worth of information. It is not feasible to go over an entire chapter with someone in a forum like this. i.e. I can't simply explain all of them or the entire chapter, and getting you started on the first one or two isn't going to help you with the rest, because they're all different, and adjusting entries don't even have an "order" to them. (It's not like "step one is blah blah.")

I can give you some general information about adjusting entries. First, they're still just entires. i.e. they have a debit and credit like any other entry, for the purpose of increasing or decreasing the balance in an account. They don't have any different rules than what you should have already learned for entries.

Their difference is in the timing of them. It's generally when there's a separation between when the cash happens and when a revenue or expense should be recognized on the books. "Recognize" means to record it, so that it is reflected on the books. It's also usually when no transaction has actually happened -- it's just something that needs recorded.

As an example, salaries. If people get paid every week on Friday, normally you'd have an actual transaction every Friday when the payment happens, and you'd debit the expense and credit the cash that was paid. That's just a normal, everyday transaction. But what if the accounting period ends on a Wednesday, and the pay isn't until Friday. That means there's 3 days in this accounting period and 2 days in the next accounting period. And we have to record those 3 days THIS period, because we have to recognize that the expense has actually happened. When people work for you, you're incurring that expense each day even though you don't pay until later. So we need to get the expense for those 3 days on the books. However, it hasn't been paid yet, and is due later, and everything due later is a payable. In most cases, you can match up the names: i.e. salaries expense, so the payable is salaries payable. (Or interest expense and interest payable, or tax expense and tax payable. Etc.)

As you see, this adjusting entry is because the occurrence of the expense is not in the same period as when the payment happens. And since we haven't actually done the payroll yet, nothing has been recorded as a normal, day-to-day transaction. So the adjusting entry is solely for the purpose of getting the 3 days of expense onto the books.

That's the basic concept behind why adjusting entries exist and what they are. That of course is only one example. There are several types of them. And hopefully you can see now why I can't just explain every single one that could exist.

See if, with that additional info, you can understand anything in the book more easily and get an idea how some of these are done, looking at the examples of how they're recorded. If you need help, you're going to have to take it one step at a time and ask one thing at a time. Like a specific example in the book that you don't understand. If you want to make an attempt to do any of these and just want them checked, go for it.

[chabutalty]

Over my dead body
My nose was bleeding about accounting
Please I need some any example about this thank you!
And please answer..

[morgaine300]

Over your dead body? Huh?

I already answered. Read prior post. Including an example, which is what you requested.

Especially re-read the last paragraph.

[pready]

First you need to create a Worksheet using Excel. Your first column you will list your Accounts, the 2nd and 3rd columns will be for the trial balance with the 2nd column being for your Debit balances and the third column for your credit balances. At the end of your columuns you will add your balances and your Debit Balance should equal your credit balances.

Next you will do your adjustments in columns 4 and 5 with column 4 for debits and column 5 for credits. For your adjustments you need to figure out what the transaction is, the amounts what accounts are affected and how the accounts are affected. An adjusting entry will always affect one Income Statement account and one Balance Sheet account. For example on your fisrt entry for Dec 31 you have earned interest. Did you receive the interest? No, you did not, so this means that the interest is owed to you. What accounts are affected? First is Interest Revenue (Income Statement account) and second is Interest Receivable (Balance Sheet account) the amount is $1250. You now have the information needed to do the adjusting entry; Column 4 for Interest Receivable you put 1250 and in column 5 for Interest Revenue you put 1250. If you do not have these accounts you will add them to column 1. After you do all your adjustments you will add your totals in column 4 and the amount should equal the total amount in column 5. Next you have columns 6 and 7 for your adjusted trial balance. You balance your accounts across from columns 1 to 5 to either column 6 or column 7. column 6 is for your Debit balances and column 7 is for your Credit Balances. Next you add the totals in column 6and it should equal your column 7 balance.

Note: Your Debits should always equal your Credits: The worksheet is a very useful tool in preparing your financial statements.

I have created a partial worksheet to show you how how to sart one and to show you the format of one.