I need help preparing adjusted journal entries, the directions say: Prepare adjusting journal entries as of August 31, 20×7.
a. Expired insurance, $ 1,530.
b. Inventory of unused delivery supplies, $ 715.
c. Inventory of unused office supplies, $ 93.
d. Estimated depreciation on the building, $ 7,200.
e. Estimated depreciation on trucks, $ 7,725.
f. Estimated depreciation on the office equipment, $ 1,350.
g. The company credits the lockbox fees of customers who pay in advance to the Unearned Lockbox Fees account. Of the amount credited to this account during the year, $ 2,815 had been earned by August 31.
h. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period, $ 408.
i. Accrued but unpaid truck drivers’ wages at the end of the year, $ 960.
j. Management estimates federal income taxes to be $ 6,000.
I figured a few out but I would really appreciate to compare what I have to anyone Else’s ideas. This is what I have and the format im looking for:
a. DR Insurance Expense 1,530
CR Prepaid Insurance 1,530
b. DR Delivery Supplies Expense 715
CR Delivery Supplies 715
c. DR Office Supplies Expense 93
CR Office Supplies 93
d. DR Depreciation Expense – Bldg 7,200
CR Accumulated Depreciation- bldg 7,200
e. DR Depreciation Expense – Truck 7,725
CR Accumulated Depreciation Truck 7,725
f. DR Depreciation Expense- Office Supplies 1,350
CR Accumulated depreciation- office supplies 1,350
g. DR Lockbox Fee Earned 2,815
CR Unearned Lockbox Fee 2,815
h. ?
i. DR Wage Expense 960
CR Wages Payable 960
j. DR Income Tax Expense 6,000
CR Income Taxes Payable 6,000
a. DR Insurance Expense 1,530
CR Prepaid Insurance 1,530
Correct
b. DR Delivery Supplies Expense 715
CR Delivery Supplies 715
Incorrect
They tell you that the inventory of unused supplies is $ 715, Since they don’t tell you what the beginning balance of the supplies account is, you should assume it is zero and supplies were recorded as an expense when acquired. The closing entry then, would be the exact opposite of the one you suggest. It would be:
Debit Delivery Supplies $ 715
Credit Delivery Supplies Expense $ 715
c. DR Office Supplies Expense 93
CR Office Supplies 93
Incorrect – Same reason as b.
The correct entry would be
Debit Office Supplies $ 93
Credit Office Supplies Expense $ 93
d. DR Depreciation Expense – Bldg 7,200
CR Accumulated Depreciation- bldg 7,200
Correct
e. DR Depreciation Expense – Truck 7,725
CR Accumulated Depreciation Truck 7,725
Correct
f. DR Depreciation Expense- Office Supplies 1,350
CR Accumulated depreciation- office supplies 1,350
Correct
g. DR Lockbox Fee Earned 2,815
CR Unearned Lockbox Fee 2,815
Incorrect – You reversed the debits and credits. The correct entry is:
Debit Unearned Lockbox Fee $ 2,815
Credit Lockbox Fee Earned $ 2,815
h.
Debit Accounts Receivable $ 408
Credit Lockbox Fee Earned $ 408
i. DR Wage Expense 960
CR Wages Payable 960
Correct
j. DR Income Tax Expense 6,000
CR Income Taxes Payable 6,000
Correct