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Chapter 3: 24E_3 (page 164)

Question :The accounting records of Mackay Architects include the following selected, unadjusted balances at March 31: Accounts Receivable, \(1,500; Office Supplies, \)700; Prepaid Rent, \(2,240; Equipment, \)8,000; Accumulated Depreciation—Equipment, \(0; Salaries Payable, \)0; Unearned Revenue, \(900; Service Revenue, \)4,100; Salaries Expense, \(800; Supplies Expense, \)0; Rent Expense, \(0; Depreciation Expense—Equipment, \)0. The data developed for the March 31 adjusting entries are as follows: a. Service revenue accrued, \(700. b. Unearned revenue that has been earned, \)100. c. Office Supplies on hand, \(300. d. Salaries owed to employees, \)200. e. One month of prepaid rent has expired, \(560. f. Depreciation on equipment, \)120. Requirements 1. Open a T-account for each account using the unadjusted balances given. 2. Journalize the adjusting entries using the letter and March 31 date in the date column. 3. Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account’s adjusted balance.

Short Answer

Expert verified

T accounts are as follows:

Accounts Receivable

$1,500

(a)

700

Bal.

$2,200

Office Supplies

$700

$400

(c)

Bal.

$300

Prepaid Rent

$2,240

$560

(e)

Bal.

$1,680

Equipment

$8,000

Bal.

$8,000

Accumulated Depreciation- Equipment

$120

(f)

$120

Bal.

Salaries Payable

$200

(d)

$200

Bal.

Unearned Revenue

$900

(b)

$100

$800

Bal.

Service Revenue

$4,100

$700

(a)

$100

(b)

$4,900

Bal.

Salaries Expense

$800

(d)

$200

Bal.

$1,000

Supplies Expense

(c)

$400

Bal.

$400

Rent Expense

(e)

$560

Bal.

$560

Depreciation Expense-Equipment

(f)

$120

Bal.

$120

Step by step solution

01

Step-by-Step-SolutionStep1: Explanation on T account

T account is prepared in the T style fortmat, which records the changes in the accounts.

02

Explanation on Adjusting Entries

Adjusting entries are the year end entries, which are recorded to record the accrued revenues and expenses for the period.

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Most popular questions from this chapter

Question :At the end of June, Gerber Dental had performed $9,000 of dental services but has not yet billed customers. Record the adjusting entry for accrued revenue.

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On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero. Requirements 1. Calculate the amount of depreciation for the month of October using the straightline depreciation method. 2. Record the adjusting entry for depreciation on October 31. 3. Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation— Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at October 31. 4. What is the computer equipment’s book value on October 31?
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