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P3-42B, cont.
P3-42B, cont.
P3-42B, cont.
Requirement 3
Requirement 4
P3-43B Using the worksheet to record the adjusting journal entries
Learning Objective 6
Galaxy Theater Production Company’s partially completed worksheet as of December 31, 2018, follows.
Adjustment data at December 31 follow:
a. As of December 31, Galaxy had performed $900 of service revenue but has not yet billed customers.
b. At the end of the month, Galaxy had $500 of office supplies remaining.
c. Prepaid Insurance of $600 remained.
d. Depreciation expense, $4,200.
e. Accrued salaries expense of $150 that hasn’t been paid yet.
Requirements
1. Complete the worksheet. Use letters a through e to label the five adjustments.
2. Journalize the adjusting entries.
SOLUTION
Requirement 1
P3-43B, cont.
Requirement 2
P3A-44B Understanding the alternative treatment of prepaid expenses and unearned
revenues
Learning Objectives 3, 7 Appendix 3A
Sent It Pack’n Mail completed the following transactions during 2018:
Requirements
1. Journalize the transactions assuming that Sent It Pack’n Mail debits an asset account for
prepaid expenses and credits a liability account for unearned revenues.
2. Journalize the related adjusting entries at December 31, 2018.
3. Post the journal and adjusting entries to the T-accounts, and show their balances at December
31, 2018. (Ignore the Cash account.)
4. Repeat Requirements 1–3. This time debit an expense account for prepaid expenses and credit
a revenue account for unearned revenues.
5. Compare the account balances in Requirements 3 and 4. They should be equal.
SOLUTION
Requirement 1
P3A-44B, cont.
Requirement 2
P3A-44B, cont.
Requirement 3
Requirement 4
P3A-44B, cont.
