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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.

(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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Solution Summary

The expert examines adjusting journal entries for financial accounting.