CHAPTER 3 The Adjusting Process
Prob. 3–5A (Concluded)
2.
Debit Credit
Accounts Payable 12,150
Unearned Rent 1,550
Salaries and Wages Payable 3,200
Common Stock 75,000
Retained Earnings 146,000
August 31, 2016
ROWLAND COMPANY
Adjusted Trial Balance
3-19
CHAPTER 3 The Adjusting Process
Prob. 3–6A
1. a. Supplies Expense
Supplies 2,750
Supplies used.
2. Total
Net Total Stockholders’
Income Assets = + Equity
Total
Liabilities
2,750
3-20
CHAPTER 3 The Adjusting Process
Prob. 3–1B
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
CHAPTER 3 The Adjusting Process
Prob. 3–2B
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
4. There is no effect on the “Net increase or decrease in cash” on the statement
of cash flows because adjusting entries do not affect cash.
3-22
CHAPTER 3 The Adjusting Process
Prob. 3–3B
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 Retained Earnings is the difference
3-23
CHAPTER 3 The Adjusting Process
Prob. 3–4B
2016
Mar. 31 Supplies Expense 4,025
Supplies 4,025
Supplies used ($6,200 – $2,175).
31 Insurance Expense 7,850
3-24
CHAPTER 3 The Adjusting Process
Prob. 3–5B
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
CHAPTER 3 The Adjusting Process
Prob. 3–5B (Concluded)
2.
Debit Credit
Accounts Payable 3,750
Unearned Rent 300
Salaries and Wages Payable 900
Common Stock 60,000
Retained Earnings 93,550
July 31, 2016
REECE FINANCIAL SERVICES CO.
Adjusted Trial Balance
3-26
CHAPTER 3 The Adjusting Process
Prob. 3–6B
1. a. Accounts Receivable
Fees Earned 31,900
Accrued fees earned.
2. Total
Net Total Stockholders’
Income Assets = + Equity
Total
Liabilities
31,900
3-27
CHAPTER 3 The Adjusting Process
1.
Page 3
Post.
Ref. Debit Credit
2016
July 31 Accounts Receivable 12 1,400
Fees Earned 41 1,400
Accrued fees earned (115 hrs. –
CONTINUING PROBLEM
Date
JOURNAL
Adjusting Entries
Description
3-28
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
2.
Account No. 11
Post.
Item Ref. Debit Debit Credit
2016
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
2016
July 1 Balance 1,000
21 ——
23 2 1,750 1,750
Account: Cash
Balance
CreditDate
700
1,200
620
800
Date Credit
1,000
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
2016
July 1 Balance 250
3 1 250 — —
5 1 7,500 7,500
18 2 850 8,350
Account No. 22
Balance
Balance
Account: Office Equipment
Date
Account: Wages Payable
Account: Supplies
3-30
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
Account No. 23
Post.
Account No. 33
Post.
Item Ref. Debit Credit Debit Credit
2016
July 1 Balance 500
Account:
Account: Unearned Revenue
Balance
Dividends
Balance
Date
3-31
CHAPTER 3 The Adjusting Process
Continuing Problem (Continued)
Account No. 50
Post.
July 1 Balance 800
1 1 1,750 2,550
Account No. 52
Post.
Item Ref. Debit Credit Debit Credit
Post.
Item Ref. Debit Credit Debit Credit
2016
July 1 Balance 1,590
21 2 620 2,210
Balance
Date
Balance
Date
Balance
Account: Wages Expense
Account: Equipment Rent Expense
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
2016
Account: Insurance Expense
Date
Balance
Balance
Account: Advertising Expense
3-33
CHAPTER 3 The Adjusting Process
Continuing Problem (Concluded)
3.
Debit Credit
Balances Balances
Cash 9,945
Accounts Receivable 4,150
Supplies 275
PS MUSIC
Adjusted Trial Balance
July 31, 2016
3-34
CHAPTER 3 The Adjusting Process
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
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
CASES & PROJECTS
CHAPTER 3 The Adjusting Process
CP 3–3
1. All expenses on the income statement are identified as “paid” items and
not as “expenses.”
3. No supplies, accounts payable, or wages payable are reported on the
1. Accumulated Depreciation—Truck for depreciation expense.
3. Insurance (paid) expense for unexpired insurance.
5. Utilities accrued.
CP 3–4
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