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Unruh Company

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Unruh Company

General Journal adjusting entries
Date Account/Description Debit Credit
Adjusting Entries
Sep. 30 Supplies Expense 1,500
Office Supplies 1,500
Sep. 30 Insurance Expense 1,600
Prepaid Insurance 1,600
Sep. 30 Depreciation Expense 5,400
Accumulated Depreciation-Office Equipment 5,400
Sep. 30 Unearned Service Revenue 700
Service Revenue 700
Sep. 30 Wage Expense 500
Wage Payable 500

Calculations
a. 2,700 - 1,200 = 1,500
b. 4,800 - 3,200 = 1,600
c. 5,400
d. 1,200 - 500 = 700
e. 500

LOST-THE-MOST'S FITNESS CENTER
Service Revenue 105,000
Interest Revenue 8,000
Less: Utilities Expense 12,000
Salaries Expense 30,000
Supplies Expense 9,000
Insurance Expense 6,000
Depreciation Expense, Building 25,000
Depreciation Expense, Equipment 2,000 84,000
Net Income 29,000

Lost-the-Most, Capital 195,000
Add: Net Income 29,000
Less: Drawing 15,000
Lost-the-Most, Capital as of 12/31/2006 209,000

2. Prepare end of the year General Journal closing entries (without explainations) for the Fitness Center.

Date Account/Description Debit Credit
Adjusting Entries
Dec. 31 Service Revenue 105,000
Interest Revenue 8,000
Income Summary 113,000

Dec. 31 Income Summary 84,000
Utilities Expense 12,000
Salaries Expense 30,000
Supplies Expense 9,000
Insurance Expense 6,000
Depreciation Expense, Building 25,000
Depreciation Expense, Equipment 2,000

Dec. 31 Lost-the-Most, Capital 15,000
Lost-the-Most, Drawing 15,000

Dec. 31 Income Summary 29,000
Lost-the-Most, Capital 29,000

3

Lost-the-Most's Fitness Center
Balance Sheet
December 31, 2006

Assets
Cash 11,000
Accounts Receivable 25,000
Supplies 4,000
Prepaid Insurance 8,000
Land 10,000
Buildings 215,000
Accumulated Depreciation, Building (100,000) 115,000
Equipment 65,000
Accumulated Depreciation, Equipment (20,000) 45,000
Patents 10,000
Total Assets 228,000

Liabilities & Equity
Accounts Payable 7,000
Wages Payable 2,000
Notes Payable 10,000
Total Liabilities 19,000

Lost-the-Most, Capital 209,000
Total Liabilities & Equity 228,000

4. Compute Bad Debts Expense for Moatz Company based on the following information:

a) Net credit sales = 500,000 - 20,000 = 480,000
Uncollectible = 2% x 480,000 = 9,600
Bad Debt Expense = 9,600 - 5,000 = 4,600

b. Accounts Receivable 120,000
Uncollectible = 4% x 120,000 = 4,800
Bad Debt Expense = 4,800 - 200 = 4,600

5. Goyal Company uses the allowance method for estimating uncollectible accounts.

Date Account Debit Credit
Jan. 5 Accounts Receivable 1,200
Merchandise Inventory 1,200
Apr. 15 Cash 200
Accounts Receivable 200
Aug. 21 Allowance for Doubtful ...

Solution Summary

This solution is comprised of a detailed explanation to prepare the General Journal adjusting entries that should be made by Unruh Company on September 30.

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