Effects of reversing entries
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SE1: Resequence the following activities to include the usual order of the accounting cycle.
b. Analyze the transactions
f. Record the transactions in the journal
c. Post the entries to the ledger
h. Prepare the initial trial balance
e. Adjust the accounts
d. Prepare the financial statements
a. Close the accounts
i. Prepare the adjusted trial balance
g. Prepare the post-closing trial balance
j. Reversing Entries
SE2: Assume that at the end of the accounting period there are credit balances of $3,400 in Patient Services Revenues and $1,800 in Laboratory Fees Revenues. Prepare the required closing entry in journal form. The accounting period ends December 31.
General Journal
Date
Item Post.
Ref.
Debit
Credit
Dec 31 Patient Services
Revenue 3,400
Laboratory Fees
Revenue 1,800
Income Summary
Date
Item Post.
Ref.
Debit
Credit
Dec 31 Closing 5,200
Close Expenses accounts to income summary
SE3: Assume that debit balances at the end of the accounting period are $1,400 in Rent Expense, $1,100 in Wage Expense, and $500 in Other Expense. Prepare the required closing entry in journal form. The accounting period ends December 31.
General Journal
Date
Item Post.
Ref.
Debit
Credit
Dec 31 Rent Expense 1,400
Wage Expense 1,100
Other Expense 500
Income Summary
Date
Item Post.
Ref.
Debit
Credit
Dec 31 Close Expenses accounts to income summary
3,000
SE4: Assuming that total revenues were $5,200 and total expenses were $3,000, prepare the entry in journal form to close the Income Summary account to the H. Blake, Capital account. The accounting period ends December 31.
Income Summary
Date
Item Post
Ref.
Debit
Credit Balance
Debit Credit
Dec 31
Income Summary
H. Blake Capital
Closed the Income Summary account
2,200
2,200
SE5: Assuming that withdrawals during the accounting period were $800, prepare the entry in journal form to close the H. Blake, Withdrawals account to the H. Blake, Capital account- The accounting period ends December 31.
Date
Item Post
Ref.
Debit
Credit Balance
Debit Credit
Dec 31
H. Blake Capital
800
H. Blake Withdrawal 800
Close Withdrawals to H. Blake Capital
SE6: Show the effects of the transactions in SE2, SE3, SE4, and SE5 by entering beginning balances in appropriate T accounts and recording the transactions. Assume that the H. Blake, Capital account has a beginning balance of $1,300.
Combined effect of H Blake's capital in Owner's Equity
Capital-Bal $1,300
Less: Drawing $800
Other expenses $500
Add: Retained Earning $2,200
Total Owner's equity & Retained earning $2,700
Patient Service Revenue
Closing 3,400
Beg. Bal 3,400
Laboratory Revenue
Closing 1,800
Beg. Bal 1,800
Rent Expense
Beg. Bal 1,400
Closing 1,400
Wages Expense
Beg. Bal 1,100
Closing 1,100
Other Expenses
Beg. Bal 500
Closing 500
Retained Earnings
Dividend 0
Beg. Bal 0
Closing Net income 2,200
H. Blake, Capital Account
Withdrawal 800
Beg. Bal 1,300
H. Blake, Withdrawal Account
Beg. Bal 800
Capital 800
Income summary
Expenses: Revenues:
Wages $1,100 Patent Revenue $3,400
Rent Expense $1,400 Lab Revenue $1,800
Other Expenses $500
Closing-Retained earning $2,200
$5,200 $5,200
Combined effect of H Blake's capital in Owner's Equity
Capital-Bal $1,300
Less: Withdrawals $800
$500
Add: Retained Earning $2,200
Total Owner's equity & Retained earning $2,700
SE7: Below, indicated by letters, are the adjusting entries at the end of March. Prepare the required reversing entry in journal form.
Account Name Debit Credit
Prepaid Insurance
Accumulated Depreciation, Office Equipment
Salaries Expense
Insurance Expense
Depreciation Expense, Office Equipment
Salaries Payable
(c) 360
(a) 180
(b) 1,050 (a) 180
(b) 1,050
(c) 360
1,590 1,590
SE8: Assume that prior to the adjustments in SE7, Salaries Expense had a debit balance of $1,800 and Salaries Payable had a zero balance. Prepare a T account for each of these accounts. Enter the beginning balance; post the adjustment for accrued salaries, the appropriate closing entry, and the reversing entry; and enter the transaction in the Y accounts for a payment of $480 for salaries on April 3.
Pre-Paid Insurance
Accumulated Depreciation, Office Equipment
Salaries Expense
Insurance Expense
Depreciation Expense, Office Equipment
Salaries Payable
H. Blake, Capital Account
H. Blake, Withdrawal Account
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Solution Summary
I have provided herewith complete solution step by step to all of your questions from E1 through E8 in a separate Excel file attached herewith.Please look in to sheet 2 for more information on Reverse entries.I have also provided necessary explanatory notes and calculations where necessary.
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