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Adjusting journal entries for year end

McCallister & Speass Plowing Company is completing the accounting process for the year ending December 31, 2009. The transactions during 2009 have been journalized and posted. The following data with respect to adjusting entries was available. Please record the required adjusting entries for December 2009.

a. Two plowing jobs were completed at the end of December; however the service was not recorded for $5,000.
b. Wages earned by employees during December 2009, unpaid and unrecorded totaled $2,500. The next payroll date is January 5, 2010.
c. On October 1st the company paid $10,000 to the local newspaper for five months of advertising. All ads had been run for October, November, and December.
d. Estimated depreciation for December was $15,000
e. Supplies on hand as of January 1, 2009 totaled $20,000. Purchases recorded for the year totaled $50,000. A December 31, 2009 inventory revealed a Supplies balance of $25,000.

Solution Preview

a. The jobs are completed and so we would record the revenue. The adjusting entry would be
Accounts Receivable Dr 5,000
Service Revenue Cr 5,000

b. We record the unpaid wages. The adjusting ...

Solution Summary

The solution explains the adjusting entries to be made at year end.