1. a. Supplies Expense
Supplies 2,750
Supplies used.
2. Total
Net Total Owner’s
Income Assets = + Equity
2,750
Total
Liabilities
3-20
1. a. Accounts Receivable 19,750
Fees Earned 19,750
Accrued fees earned.
b. Supplies Expense 8,150
2. Adjusting entries are a planned part of the accounting process to update the
3-21
1. a. Supplies Expense 2,620
Supplies 2,620
Supplies used ($3,170 – $550).
b. Depreciation Expense 1,675
2. Fees Earned would be understated by $6,000; Depreciation Expense would
3. Accumulated Depreciation—Equipment would be understated by $1,675; total assets
would be overstated by $1,675; Unearned Fees would be overstated by $6,000; total
4. There is no effect on the “Net increase or decrease in cash” on the statement
of cash flows, since adjusting entries do not affect cash.
3-22
1. a. Supplies Expense 5,820
Supplies 5,820
Supplies used ($7,200 – $1,380).
b. Accounts Receivable 3,900
2. Revenues…………………
…
$305,800
…
…
…
4. The effect of the adjusting entries on Diana Keck, Capital is the difference
3-23
CHAPTER 3 The Adjusting Process
Prob. 3–4B
2014
Mar. 31 Supplies Expense 4,025
3-24
1. a. Depreciation Expense—Building 6,400
Accumulated Depreciation—Building 6,400
Building depreciation.
b. Depreciation Expense—Equipment 2,800
Accumulated Depreciation—Equipment 2,800
3-25
2.
Debit Credit
Accounts Payable 3,750
Unearned Rent 300
Salaries and Wages Payable 900
Joni Reece, Capital 153,550
Joni Reece, Drawing 8,000
July 31, 2014
REECE FINANCIAL SERVICES CO.
Adjusted Trial Balance
3-26
1. a. Accounts Receivable
Fees Earned 31,900
Accrued fees earned.
2. Total
Net Total Owner’s
Income Assets = + Equity
Total
Liabilities
31,900
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1.
Page 3
Post.
Ref. Debit Credit
2014
Date
JOURNAL
Adjusting Entries
Description
3-28
2.
Account No. 11
Post.
Item Ref. Debit Debit Credit
2014
13 1 11,620
14 1 10,420
16 2 2,000 12,420
21 2 11,800
22 2 11,000
Item Ref. Debit Debit Credit
2014
July 1 Balance 91,000
21 ——
23 2 1,750 1,750
1,000
Date Credit
700
1,200
620
800
Account: Cash
Balance
CreditDate
3-29
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
Account No. 14
Post.
31 Adjusting 3 225 2,475
Account No. 17
Post.
Item Ref. Debit Credit Debit Credit
2014
July 1 Balance 9250
3 1 250 — —
5 1 7,500 7,500
18 2 850 8,350
Account No. 22
Account: Supplies
Account: Wages Payable
Balance
Balance
Account: Office Equipment
Date
3-30
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
Account No. 23
Post.
Account No. 32
Post.
Item Ref. Debit Credit Debit Credit
2014
July 1 Balance 9500
11 1 1,000 7,200
16 2 2,000 9,200
23 2 2,500 11,700
30 2 1,500 13,200
31 2 3,000 16,200
Balance
Balance
Date
Account: Unearned Revenue
Account: Peyton Smith, Drawing
3-31
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
Account No. 50
Post.
July 1 Balance 9800
1 1 1,750 2,550
Account No. 52
Post.
Item Ref. Debit Credit Debit Credit
Post.
Item Ref. Debit Credit Debit Credit
2014
July 1 Balance 91,590
21 2 620 2,210
Account: Equipment Rent Expense
Balance
Account: Wages Expense
Balance
Date
Balance
Date
3-32
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
Account No. 55
Post.
31 Adjusting 3 745 925
Account No. 57
Post.
Item Ref. Debit Credit Debit Credit
2014
Balance
Account: Advertising Expense
Balance
Account: Insurance Expense
Date
3-33
3.
Debit Credit
Balances Balances
PS MUSIC
Adjusted Trial Balance
July 31, 2014
3-34
CP 3–1
It is acceptable for Daryl to prepare the financial statements for Squid Realty Co. on
an accrual basis. The revision of the financial statements to include the accrual of
CP 3–2
(2014), Ford Motor Company would estimate warranty costs and expenses at the end
of 2014 using its past warranty (repair) history with the Ford 350F. This estimate
CP 3–3
Revenue is normally recorded when the services are provided or when the
goods are delivered (title passes) to the buyer. By waiting until after the services
are provided, the expenses of providing the services can be more accurately
(1) The receipt of revenue from customers in advance of a flight represents
(2) At the end of the airline’s accounting period, it would have adjusting entries
related to such items as the following:
●Accrued wages for employees
3-36
CHAPTER 3 The Adjusting Process
CP 3–4
2. No expense is reported on the income statement for depreciation, and no
accumulated depreciation is reported on the balance sheet.
3. No supplies, accounts payable, or wages payable are reported on the
2. Supplies (paid) expense for supplies on hand.
4. Wages accrued.
CP 3–5
Note to Instructors: The purpose of this activity is to familiarize students with
behaviors that are common in codes of conduct. In addition, this activity
addresses an actual ethical dilemma for students related to doing their
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