Chapter 4

1. Chapter4 Adjusting Entriesand the Work Sheet

2. Accounting at Activision

At Activision, property and equipment consists of buildings, computer equipment, leasehold improvements, office furniture, and other miscellaneous equipment.

Consider how Activision records wear and tear on these assets.

Royalty-Free/Corbis 3. Performance Objectives

Definef iscal periodandfiscal year .

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Complete a work sheet for a service enterprise, involving adjustments for expired insurance, depreciation, and accrued wages.

4. Performance Objectives (contd)

Prepare an income statement, a statement of owners equity, and a balance sheet for a service business directly from the work sheet.

Journalize and post adjusting entries.

5. Performance Objectives (contd)

Prepare

an income statement involving more than one revenue account and a net loss,

a statement of owners equity with an additional investment and either a net income or a net loss,

a balance sheet for a business having more than one accumulated depreciation account, and

a balance sheet containing the statement of owners equity information.

6. Performance Objective 1

Definef iscal periodandfiscal year .

Royalty Free C Squared Studios/ Getty Images 7. Fiscal Period

Any period of time covering a complete accounting cycle

The period could be:

One month

One quarter

One year

8. Fiscal Year

A fiscal period consisting of twelve consecutive months

Does not have to coincide with the calendar year

9. Accounting Cycle

The sequence of steps in the accounting process completed during the fiscal period

Royalty Free C Squared Studios/ Getty Images 10. Steps in the Accounting Cycle Chapter 3

Analyze source documents and record business transactions in a journal.

Post journal entries to the ledger accounts.

Prepare a trial balance.

Chapter 4

Gather adjustment data and record adjustments in the work sheet.

Complete the work sheet.

Prepare financial statements from data in work sheet.

Journalize and post the adjusting entries.

Chapter 5

Journalize and post the closing entries.

Prepare a post-closing trial balance.

11. 12. Work Sheet

A working paper used by accountants to record necessary adjustments and provide up-to-date account balances needed to prepare the financial statements

A tool used by accountants to bring all the account information together to prepare financial statements

13. Work Sheet(contd) 14. Performance Objective 2

Royalty Free C Squared Studios/ Getty Images 15. Classifications of Accountsin a Column Work Sheet

What are the classifications of accounts that appear in the Trial Balance, Income Statement, and Balance Sheet columns?

Remember your T accounts:

16. Fundamental Accounting Equationand Normal Balances of Accounts 17. Income Statement Columns:Revenue Minus Expenses 18. Balance Sheet Columns: AssetsEqual Liabilities Plus Owners Equity 19. Classifications of Accountsin Each Column of a Work Sheet 20. Classifications of Accountsin Each Column of a Work Sheet(contd) 21. Classifications of Accountsin Each Column of a Work Sheet(contd) 22. Performance Objective 3

Royalty Free PhotoDisc Blue/ Getty Images 23. Adjustments 24. Adjustments(contd)

Internal transactions that bring ledger accounts up to date as a planned part of the accounting procedure

First recorded in the Adjustments columns ofthe work sheet

Directly affect accounts on the

Income statement

Balance sheet

Make financial statements more accurate

25. Adjustment for Prepaid Insurance

When a company pays for insurance in advance, it is debited to Prepaid Insurance.

The expired portion is credited to Prepaid Insurance and debited to Insurance Expense.

26. Recording theAdjustment on the Work Sheet

Label the debit and credit amounts of the adjustment with (a) in the Adjustment columns.

Extend the new amount in the Prepaid Insurance account to the Balance Sheet debit column.

Extend the new amount for the Insurance Expense account to the Income Statement debit column.

27. Adjustment for PrepaidInsurance Recorded in Work Sheet 28. Depreciation

Depreciation is an expense based on the expectation that an asset will gradually decline in usefulness due to time, wear and tear, or obsolescence; the cost of the asset is therefore spread out over its estimated useful life.

A portion of depreciation expense is allotted to each fiscal period.

29. Depreciation(contd)

Systematically spreads out the cost of these assets over their useful lives

Matches the expenses for one period to the revenue generated for that same period

30. Straight-line Depreciation

A means of calculating depreciation in which the cost of an asset, less any trade-in value, is allocated evenly over the useful life of the asset

(Cost - Trade-in Value)/(Useful Life in Years)

Cost of Equipment $83,720.00 Salvage $13,160.00 Useful Life in Years 7 Clines Computer Clinic 31. Calculating Straight-lineDepreciation

Subtract the trade-in value from the cost to get the depreciable amount.

$83,720 - $13,160 = $70,560

32. Calculating Straight-lineDepreciation(contd)

Divide the depreciable amount by the number of years of useful life.

$70,5607 years = $10,080 per year

33. Calculating Straight-line Depreciation(contd)

Divide the depreciation for one year by 12.

$10,08012 months = $840 per month

34. Adjustment forDepreciation of Equipment

Now that we have calculated the depreciation expense, what is the adjustment?

Depreciation Expense, Equipment 840 Accumulated Depreciation, Equipment840 Why dont we credit the Equipment account for this depreciation? The Equipment account must remain at the original cost.Debit Credit 35. Contra Accounts

Contra account

An account that is contrary to, or a deduction from, another account

Contra asset account

An account that is contrary to or a deduction from its companion asset account

Accumulated Depreciation, Equipment is a contra account.

36. Accumulated Depreciation

Contra asset account:

A contra asset account is connected to the related asset account.

Debits and credits are the same.

Plus and minus signs are reversed because the contra asset account is subtracted from the related asset account.

Depreciation is recorded in the contra asset account.

Depreciation is never subtracted directly from the related asset.

37. Accumulated Depreciation(contd) 38. Book Value or Carrying Value

The cost of an asset minus its accumulated depreciation

Listed on the balance sheet

39. Adjustment for DepreciationRecorded in Work Sheet 40. Adjustment for Wages Expense

Why is this adjustment necessary?

The end of the pay period rarely falls on the same day as the end of the fiscal period.

Accrued wages

The amount of unpaid wages owed to employees for the time between the end of the last pay period and the end of the fiscal period

Accounts used:

Wages Expense (DR)

Wages Payable (CR)

41. Adjustment for Wages Expense(contd) 42. Adjustment for Wages Expense(contd) 43. Adjustment for Wages Expense(contd) 44. Adjustment for Wages Expensefor Clines Computer Clinic 45. Adjustment for Wages Expense Recorded in Work Sheet 46. Placement of Accounts in the Work Sheet

Pay special attention to the Capital and Drawing accounts.

The normal balance of the Capital accountis a credit.

The normal balance of the Drawing accountis a debit.

R.P. Cline, Capital R.P. Cline, Drawing - + + - Debit Credit Balance Debit Balance Credit 47. Placement of Accountsin the Work Sheet(contd)

Pay special attention to the normal balances of the Equipment and Accumulated Depreciation, Equipment accounts.

48. Placement of Accountsin the Work Sheet(contd)

Enter adjustments.

Extend amounts to Income Statement and Balance Sheet columns.

Calculate net income.

49. Calculating Net Income E R 50. Complete a Work Sheetfor a Service Enterprise 51. Steps to Complete Work Sheet

Complete Trial Balance columns, total, and rule (DR = CR).

Complete Adjustments columns, total, and rule (DR = CR).

Label entries with letter references: (a), (b), etc.

Complete Adjusted Trial Balance columns, total, and rule (DR = CR).

Record balances in Income Statement and Balance Sheet columns and total each column (DR CR).

52. Steps to Complete Work Sheet(contd)

Record net income or net loss.

Subtract the smaller of the Income Statement columns from the larger; add the difference to the smaller side, total, and rule (DR = CR).

If there is a net income, the credit side of the columns will be larger and you will place net income on the debit side.

If there is a net loss, the debit side of the columns will be larger and you will place net loss on the credit side.

53. Steps to Complete Work Sheet(contd)

Record net income or net loss in the Balance Sheet columns.

Subtract the smaller side from the larger side; add the difference to the smaller side, total, and rule (DR = CR).

The amount should equal the difference between the Income Statement columns.

54. Work Sheets with Two Pages

Totals at the bottom of the first page of the work sheet may not be equal.

DR must equal CR at the bottom of the second or last page.

55. Finding Errors in Income Statement and Balance Sheet Columns

Are the totals across the Adjusted Trial Balance columns correct?

Are the Adjusted Trial Balance amounts moved to the correct column?

Revenues and expenses to Income Statement columns?

Everything else to Balance Sheet columns?

Is the addition for totals and footings correct?

Is net income or net loss placed in the correct columns?

56. Performance Objective 4

Royalty Free PhotoDisc Blue/ Getty Images 57. Income Statement

Copy all revenue and expenses from the Income Statement columns to the income statement.

58. Statement of Owners Equity

Always check the beginning balance of the Capital account.

Were there any additional investments?

Record net income or net loss.

Were there any withdrawals?

Remember:

Since we list the Capital account twice, the appropriate date must be included alongside the account title.

59. Statement of Owners Equity(contd) 60. Balance Sheet

Copy all assets, contra asset accounts, and liabilities to the balance sheet.

Use the ending Capital account balance from the statement of owners equity.

The date for the statement is the end of the period date (just one day).

61. Balance Sheet(contd) 62. Performance Objective 5

Journalize and post the adjusting entries.

Royalty Free PhotoDisc Blue/ Getty Images 63. Why Journalize and Post?

Adjustments are only on the work sheet, not officially in the books.

Adjusting entries are necessary to bring the books up to date at the end of the fiscal period.

First journalize the adjustments in the general journal.

Then post the adjustments to the appropriate ledger account.

64. Ethics Discussion

The bookkeeper for Casual Wear Inc. decidesnot to record the adjustment for depreciation this month. She says that shell catch up on the adjustments next month when she has more time. What is the ethical problem with her decision?

If investors or managers rely on this months financial statements for decision making, the income statement will overstate income by the amount of unrecorded depreciation. 65. Journal Entries Be sure to write Adjusting Entriesbefore you begin the entries. 66. Post the Journal Entries Be sure to write Adjusting in the Item column. 67. Performance Objective 6

Prepare

68. An Income Statement Involving MoreThan One Revenue Account and a Net Loss 69. A Statement of Owners Equity with an Additional Investment and Net Income 70. A Statement of Owners Equity with an Additional Investment and a Net Loss 71. An Income Statement with More Than One Depreciation Expense Account 72. A Balance Sheet with More Than One Accumulated Depreciation Account 73. Internet Research

Locate the most recent annual balance sheet for NCI Building Systems, Inc.

Review the Notes to the Financial Statements for information about the companys property, plant, and equipment for which depreciation is recorded.

What kinds of assets does the company depreciate?

The company depreciates buildings and improvements; machinery, equipment, and furniture; transportation equipment; and computer software and equipment.http://www.ncilp.com/nci/investor_relations.htm 74. A Balance Sheet ContainingStatement of Owners Equity Information 75. Review Question

What is the difference between a fiscal period and a fiscal year?

A. fiscal period is any period of time covering a complete accounting cycle. A fiscal year is always twelve months, but does not have to coincide with the calendar year. 76. Review Question

What are the classifications at the top of each column of a ten-column work sheet?

A. Trial Balance, Adjustments, Adjusted Trial Balance, Income Statement, and Balance Sheet 77. Review Question

What two accounts are affected by an adjustment to record depreciation?

A. Depreciation Expense and Accumulated Depreciation 78. Review Question

What is an accrual?

A. Recognition of an expense or a revenue that has been incurred (expense) or earned (revenue) but has not yet been recorded 79. Demonstration Problem

The account balances of Colfeld Company asof June 30, 2007, the end of the fiscal year, are shown on the following slide.

We will complete the following tasks:

Complete the work sheet.

Prepare an income statement.

Prepare a statement of owners equity.

Prepare a balance sheet.

Journalize the adjusting entries.

80. DR CR DR CR DR CR DR CR Cash 4,381.00 Accounts Receivable 578.00 Prepaid Property Insurance 397.00 Prepaid Auto Insurance 1,138.00 Equipment 5,713.00 Accumulated Depreciation, Equipment 2,487.00 Accounts Payable 997.00 S. Colfeld, Capital 5,964.00 S. Colfeld, Drawing 18,000.00 Professional Fees 38,331.00 Salary Expense 16,000.00 Advertising Expense 887.00 Utilities Expense 685.00 47,779.00 47,779.00 Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name CR DR 81. Adjustment Data 82. DR CR DR CR DR CR DR CR Cash 4,381.00 Accounts Receivable 578.00 Prepaid Property Insurance 397.00 a) 200.00 Prepaid Auto Insurance 1,138.00 Equipment 5,713.00 Accumulated Depreciation, Equipment 2,487.00 Accounts Payable 997.00 S. Colfeld, Capital 5,964.00 S. Colfeld, Drawing 18,000.00 Professional Fees 38,331.00 Salary Expense 16,000.00 Advertising Expense 887.00 Utilities Expense 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 Income Statement Account Name CR DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance 83. DR CR DR CR DR CR DR CR Cash 4,381.00 Accounts Receivable 578.00 Prepaid Property Insurance 397.00 a) 200.00 Prepaid Auto Insurance 1,138.00 b) 100.00 Equipment 5,713.00 Accumulated Depreciation, Equipment 2,487.00 Accounts Payable 997.00 S. Colfeld, Capital 5,964.00 S. Colfeld, Drawing 18,000.00 Professional Fees 38,331.00 Salary Expense 16,000.00 Advertising Expense 887.00 Utilities Expense 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 Auto Insurance Expense b) 100.00 Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name CR DR 84. DR CR DR CR DR CR DR CR Cash 4,381.00 Accounts Receivable 578.00 Prepaid Property Insurance 397.00 a) 200.00 Prepaid Auto Insurance 1,138.00 b) 100.00 Equipment 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 Accounts Payable 997.00 S. Colfeld, Capital 5,964.00 S. Colfeld, Drawing 18,000.00 Professional Fees 38,331.00 Salary Expense 16,000.00 Advertising Expense 887.00 Utilities Expense 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 Auto Insurance Expense b) 100.00 Depreciation Expense, Equipment c) 500.00 DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name CR 85. DR CR DR CR DR CR DR CR Cash 4,381.00 Accounts Receivable 578.00 Prepaid Property Insurance 397.00 a) 200.00 Prepaid Auto Insurance 1,138.00 b) 100.00 Equipment 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 Accounts Payable 997.00 S. Colfeld, Capital 5,964.00 S. Colfeld, Drawing 18,000.00 Professional Fees 38,331.00 Salary Expense 16,000.00 d) 400.00 Advertising Expense 887.00 Utilities Expense 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 Auto Insurance Expense b) 100.00 Depreciation Expense, Equipment c) 500.00 Salaries Payable d) 400.00 1,200.00 1,200.00 CR DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name 86. Extend the amounts in the Trial Balance columns and the Adjustments columns to the Adjusted Trial Balance columns. 87. DR CR DR CR DR CR DR CR Cash 4,381.00 4,381.00 Accounts Receivable 578.00 578.00 Prepaid Property Insurance 397.00 a) 200.00 197.00 Prepaid Auto Insurance 1,138.00 b) 100.00 1,038.00 Equipment 5,713.00 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 2,987.00 Accounts Payable 997.00 997.00 S. Colfeld, Capital 5,964.00 5,964.00 S. Colfeld, Drawing 18,000.00 18,000.00 Professional Fees 38,331.00 38,331.00 Salary Expense 16,000.00 d) 400.00 16,400.00 Advertising Expense 887.00 887.00 Utilities Expense 685.00 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 200.00 Auto Insurance Expense b) 100.00 100.00 Depreciation Expense, Equipment c) 500.00 500.00 Salaries Payable d) 400.00 400.00 1,200.00 1,200.00 48,679.00 48,679.00 Account Name CR DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement 88. Carry the appropriate amounts to either the Income Statement columns or the Balance Sheet columns. Then calculate net income or net loss. 89. DR CR DR CR DR CR DR CR Cash 4,381.00 4,381.00 Accounts Receivable 578.00 578.00 Prepaid Property Insurance 397.00 a) 200.00 197.00 Prepaid Auto Insurance 1,138.00 b) 100.00 1,038.00 Equipment 5,713.00 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 2,987.00 Accounts Payable 997.00 997.00 S. Colfeld, Capital 5,964.00 5,964.00 S. Colfeld, Drawing 18,000.00 18,000.00 Professional Fees 38,331.00 38,331.00 38,331.00 Salary Expense 16,000.00 d) 400.00 16,400.00 16,400.00 Advertising Expense 887.00 887.00 887.00 Utilities Expense 685.00 685.00 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 200.00 200.00 Auto Insurance Expense b) 100.00 100.00 100.00 Depreciation Expense, Equipment c) 500.00 500.00 500.00 Salaries Payable d) 400.00 400.00 1,200.00 1,200.00 48,679.00 48,679.00 18,772.00 38,331.00 Income Statement Account Name CR DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance 90. DR CR DR CR DR CR DR CR Cash 4,381.00 4,381.00 4,381.00 Accounts Receivable 578.00 578.00 578.00 Prepaid Property Insurance 397.00 a) 200.00 197.00 197.00 Prepaid Auto Insurance 1,138.00 b) 100.00 1,038.00 1,038.00 Equipment 5,713.00 5,713.00 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 2,987.00 2,987.00 Accounts Payable 997.00 997.00 997.00 S. Colfeld, Capital 5,964.00 5,964.00 5,964.00 S. Colfeld, Drawing 18,000.00 18,000.00 18,000.00 Professional Fees 38,331.00 38,331.00 38,331.00 Salary Expense 16,000.00 d) 400.00 16,400.00 16,400.00 Advertising Expense 887.00 887.00 887.00 Utilities Expense 685.00 685.00 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 200.00 200.00 Auto Insurance Expense b) 100.00 100.00 100.00 Depreciation Expense, Equipment c) 500.00 500.00 500.00 Salaries Payable d) 400.00 400.00 400.00 1,200.00 1,200.00 48,679.00 48,679.00 18,772.00 38,331.00 29,907.00 10,348.00 Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name CR DR 91. DR CR DR CR DR CR DR CR Cash 4,381.00 4,381.00 4,381.00 Accounts Receivable 578.00 578.00 578.00 Prepaid Property Insurance 397.00 a) 200.00 197.00 197.00 Prepaid Auto Insurance 1,138.00 b) 100.00 1,038.00 1,038.00 Equipment 5,713.00 5,713.00 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 2,987.00 2,987.00 Accounts Payable 997.00 997.00 997.00 S. Colfeld, Capital 5,964.00 5,964.00 5,964.00 S. Colfeld, Drawing 18,000.00 18,000.00 18,000.00 Professional Fees 38,331.00 38,331.00 38,331.00 Salary Expense 16,000.00 d) 400.00 16,400.00 16,400.00 Advertising Expense 887.00 887.00 887.00 Utilities Expense 685.00 685.00 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 200.00 200.00 Auto Insurance Expense b) 100.00 100.00 100.00 Depreciation Expense, Equipment c) 500.00 500.00 500.00 Salaries Payable d) 400.00 400.00 400.00 1,200.00 1,200.00 48,679.00 48,679.00 18,772.00 38,331.00 29,907.00 10,348.00 Net Income 19,559.00 38,331.00 38,331.00 DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name CR 92. DR CR DR CR DR CR DR CR Cash 4,381.00 4,381.00 4,381.00 Accounts Receivable 578.00 578.00 578.00 Prepaid Property Insurance 397.00 a) 200.00 197.00 197.00 Prepaid Auto Insurance 1,138.00 b) 100.00 1,038.00 1,038.00 Equipment 5,713.00 5,713.00 5,713.00 Accumulated Depreciation, Equipment 2,487.00 c) 500.00 2,987.00 2,987.00 Accounts Payable 997.00 997.00 997.00 S. Colfeld, Capital 5,964.00 5,964.00 5,964.00 S. Colfeld, Drawing 18,000.00 18,000.00 18,000.00 Professional Fees 38,331.00 38,331.00 38,331.00 Salary Expense 16,000.00 d) 400.00 16,400.00 16,400.00 Advertising Expense 887.00 887.00 887.00 Utilities Expense 685.00 685.00 685.00 47,779.00 47,779.00 Property Insurance Expense a) 200.00 200.00 200.00 Auto Insurance Expense b) 100.00 100.00 100.00 Depreciation Expense, Equipment c) 500.00 500.00 500.00 Salaries Payable d) 400.00 400.00 400.00 1,200.00 1,200.00 48,679.00 48,679.00 18,772.00 38,331.00 29,907.00 10,348.00 Net Income 19,559.00 19,559.00 38,331.00 38,331.00 29,907.00 29,907.00 CR DR Colfeld Company Work Sheet For Year Ended June 30, 2007 Adjustments Balance Sheet Trial Balance Adjusted Trial Balance Income Statement Account Name 93. Prepare an Income Statement Revenue: Professional Fees $38,331.00 Expenses: Salary Expense $16,400.00 Advertising Expense 887.00 Utilities Expense 685.00 Property Insurance Expense 200.00 Auto Insurance Expense 100.00 Depreciation Expense, Equipment 500.00 Total Expenses 18,772.00 Net Income $19,559.00 For Year Ended June 30, 2007 Colfeld Company Income Statement 94. Prepare a Statement of Owners Equity S. Colfeld, Capital, July 1, 2006 $5,964.00 Net Income for the Year $19,559.00 Less Withdrawals 18,000.00 Increase in Capital 1,559.00 S. Colfeld, Capital, June 30, 2007 $7,523.00 Colfeld Company Statement of Owner's Equity For Year Ended June 30, 2007 95. Prepare a Balance Sheet Assets Cash $4,381.00 Accounts Receivable 578.00 Prepaid Property Insurance 197.00 Prepaid Auto Insurance 1,038.00 Equipment $5,713.00 Accumulated Depreciation, Equipment 2,987.00 2,726.00 Total Assets $8,920.00 Liabilities Accounts Payable $997.00 Salaries Payable 400.00 Total Liabilities $1,397.00 Owner's Equity S. Colfeld, Capital 7,523.00 Total Liabilities & Owner's Equity $8,920.00 Colfeld Company Balance Sheet June 30, 2007 96. Journalize the Adjusting Entries Description Post. Ref. Debit Credit 1 Adjusting Entries 2 2007 3 June 30 Property Insurance Expense 200.00 4 Prepaid Property Insurance 200.00 5 6 7 8 9 10 11 12 13 14 General Journal Date Page 43 Line # 97. Journalize the Adjusting Entries(contd) Description Post. Ref. Debit Credit 1 Adjusting Entries 2 2007 3 June 30 Property Insurance Expense 200.00 4 Prepaid Property Insurance 200.00 5 6 30 Auto Insurance Expense 100.00 7 Prepaid Auto Insurance 100.00 8 9 10 11 12 13 14 General Journal Date Page 43 Line # 98. Journalize the Adjusting Entries(contd) Description Post. Ref. Debit Credit 1 Adjusting Entries 2 2007 3 June 30 Property Insurance Expense 200.00 4 Prepaid Property Insurance 200.00 5 6 30 Auto Insurance Expense 100.00 7 Prepaid Auto Insurance 100.00 8 9 30 Depreciation Expense, Equipment 500.00 10 Accumulated Depreciation, Equipment 500.00 11 12 13 14 General Journal Date Page 43 Line # 99. Journalize the Adjusting Entries(contd) Description Post. Ref. Debit Credit 1 Adjusting Entries 2 2007 3 June 30 Property Insurance Expense 200.00 4 Prepaid Property Insurance 200.00 5 6 30 Auto Insurance Expense 100.00 7 Prepaid Auto Insurance 100.00 8 9 30 Depreciation Expense, Equipment 500.00 10 Accumulated Depreciation, Equipment 500.00 11 12 30 Salary Expense 400.00 13 Salaries Payable 400.00 14 General Journal Date Page 43 Line # 100. Chapter Review

Definefiscal periodandfiscal year.

101. Chapter Review(contd)

Journalize and post adjusting entries.

102. Chapter Review(contd)

Prepare

Chapter 4

Documents

Transcript of Chapter 4