This problem tests the ability to make proper adjusting entries which may effect a prior year or the current year.
A partial trial balance is provided and then there are additional adjusting information given. The instructions are to determine what adjusting entries need to be made.
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First, you adjust the balance sheet accounts to the amounts they should be based on info provided. The trick is to decide where the other side of the entry goes: either to current year income and expense (2008) or to a prior accounting period.
(a) 1. Supplies is $2700 and should be $1100. You credit supplies for $1600 and post the debit to supplies expense.
(a) 2. The narrative states that the entry to be made will all be 2008 expense. They don't say that the prior year was wrong and therefore the change happened during 2008. Accrued wages was $1500 at the beginning of the year, and you will have to make a credit entry of $2900 to ...
Given a partial trial balance and 7 items of additional information, adjust the trial balance for the information contained in the problem. Determine what the entries would be if the books have been 'closed'.