P4A-34A Preparing adjusting entries and reversing entries
Learning Objective 7 Appendix 4A
The unadjusted trial balance and adjustment data of Martha’s Motors at December 31, 2018,
follow:
Adjustment data at December 31, 2018:
a. Depreciation on equipment, $2,100.
b. Accrued Wages Expense, $1,100.
c. Office Supplies on hand, $500.
d. Prepaid Insurance expired during December, $600.
e. Unearned Revenue earned during December, $4,800.
f. Accrued Service Revenue, $1,300.
2019 transactions:
a. On January 4, Martha’s Motors paid wages of $1,900. Of this, $1,100 related to the accrued
wages recorded on December 31.
b. On January 10, Martha’s Motors received $1,500 for Service Revenue. Of this, $1,300 is
related to the accrued Service Revenue recorded on December 31.
Requirements
1. Journalize adjusting entries.
2. Journalize reversing entries for the appropriate adjusting entries.
3. Refer to the 2019 data. Journalize the cash payment and the cash receipt that occurred in
2019.
SOLUTION
Requirement 1
Requirement 2
P4A-34A, cont.
Requirement 3
Problems (Group B)
P4-35B Preparing financial statements including a classified balance sheet in report form,
preparing and posting closing entries, and preparing a post-closing trial balance
Learning Objectives 1, 3, 4
1. Net Loss $(6,600)
The adjusted trial balance of Rocket Real Estate Appraisal at June 30, 2018, follows:
Requirements
1. Prepare the company’s income statement for the year ended June 30, 2018.
2. Prepare the company’s statement of retained earnings for the year ended June 30, 2018.
3. Prepare the company’s classified balance sheet in report form at June 30, 2018.
4. Journalize the closing entries.
5. Open the T-accounts using the balances from the adjusted trial balance, and post the closing
entries to the T-accounts.
6. Prepare the company’s post-closing trial balance at June 30, 2018.
P4-35B, cont.
Requirement 4
P4-35B, cont.
Requirement 6
