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Financial Accounting - Adjusting journal entries

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On November 1, 2010 the following were the account balances of Montana Equipment Repair.

Debits Credits
Cash $2,790 Accumulated Depreciation $500
Accounts Receivable $2,910 Accounts Payable $2,300
Supplies $1,120 Unearned Service Revenue$400
Store Equipment 10,000 Salaries Payable $620
Common Stock $10,000
Retained Earnings $3,000
______ ______
$16,820 $16,820

During November the following summary transactions were completed.

Nov. 8 Paid $1,220 for salaries due employees, of which $600 is for November and $620 is for October salaries payable.
10 Received $1,500 cash from customers in payment of account.
12 Received $1,700 cash for services performed in November.
15 Purchased store equipment on account $4,000.
17 Purchased supplies on account $1,300.
20 Paid creditors $2,500on accounts payable due.
22 Paid November rent $450.
25 Paid salaries $1,000.
27 Performed services on account and billed customers for services provided $900.
29 Received $550 from customers for services to be provided in the future.

Adjustment data:

1. Supplies on hand are valued at $1,100.
2. Accrued salaries payable are $480.
3. Depreciation for the month is $250.
4. Unearned service revenue of $300 is earned.

Instructions
(a) Enter the November 1 balances in the ledger accounts. (Use T accounts.)
(b) Journalize the November transactions.
(c) Post to the ledger accounts. Use Service Revenue, Depreciation Expense, Supplies Expense, Salaries Expense, and Rent Expense.
(d) Prepare a trial balance at November 30.
(e) Journalize and post adjusting entries.
(f) Prepare an adjusted trial balance.
(g) Prepare an income statement and a retained earnings statement for November and a classified balance sheet at November 30.

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The expert examines adjusting journal entries for financial accounting.

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See Also This Related BrainMass Solution

Posting Adjusting Journal Entries and Financial Statements

The adjustments columns of the worksheet for Pear Corporation are shown below.

Adjustments
Account Titles Debit Credit
Accounts Receivable 900
Prepaid Insurance 650
Accumulated Depreciation 770
Salaries and Wages Payable 1,200
Service Revenue 900
Salaries and Wages Expense 1,200
Insurance Expense 650
Depreciation Expense 770
3,520 3,520

Instructions
(a) Prepare the adjusting entries.

(b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each balance should be extended.

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