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Chapter 3: 29E_2 (page 167)

Question :The worksheet of Best Jobs Employment Service follows but is incomplete.The following data at April 30, 2018, are given for Best Jobs Employment Service: a. Service revenue accrued, \(700. b. Office supplies used, \)300. c. Depreciation on equipment, \(1,300. d. Salaries owed to employees, \)1,400. Requirements 1. Calculate and enter the adjustment amounts directly in the Adjustments columns. Use letters a through d to label the four adjustments. 2. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 3. Prepare each adjusting journal entry calculated in Requirement 1. Date the entries, and include explanations

Short Answer

Expert verified

Worksheet is as follows:

BEST JOBS EMPLOYMENT SERVICE

Worksheet

April 30, 2018

Account Names

Unadjusted Trial Balance

Adjustments

Adjusted Trial Balance

Debit

Credit

Debit

Credit

Debit

Credit

Cash

$1,100

$1,100

Accounts Receivable

4,100

(a)

$700

4,800

Office Supplies

1,200

(b)

$300

900

Equipment

32,700

32,700

Accumulated Depreciation—Equipment

13,900

(c)

$1,300

$15,200

Salaries Payable

(d)

$1,400

1,400

Common Stock

25,200

25,200

Dividends

5,300

5,300

Service Revenue

9,000

(a)

$700

9,700

Salaries Expense

2,200

(d)

$1,400

3,600

Rent Expense

1,500

1,500

Depreciation Expense—Equipment

(c)

$1,300

1,300

Supplies Expense

(b)

$300

300

Total

$48,100

$48,100

$3,700

$3,700

$51,500

$51,500

Step by step solution

01

Step-by-Step-SolutionStep1: Explanation on Adjusted Trial Balance

Adjusted trial balance is prepared after the journalizing and posting of adjusting entries in the books of accounts.

02

Explanation on Balance

As per the adjusted trial balance, total debits and credits are equals to $51,500.

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Most popular questions from this chapter

Question :Seacoast Magazine sells subscriptions for $36 for 18 issues. The company collects cash in advance and then mails out the magazines to subscribers each month. Apply the revenue recognition principle to determine a. when Seacoast Magazine should record revenue for this situation. b. the amount of revenue Seacoast Magazine should record for eight issues.

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

On October 1, 2018, Kitchen Design paid $15,000 for store rent covering the six-month period ending March 31, 2019.

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

Question :Chef ’s Catering completed the following selected transactions during May 2018: Learning Objectives 1, 2 Learning Objectives 1, 2 > Exercises May 1 Prepaid rent for three months, \(2,400. 5 Received and paid electricity bill, \)700. 9 Received cash for meals served to customers, \(2,600. 14 Paid cash for kitchen equipment, \)3,000. 23 Served a banquet on account, \(2,800. 31 Made the adjusting entry for rent (from May 1). 31 Accrued salary expense, \)1,600. 31 Recorded depreciation for May on kitchen equipment, \(50. Date May 1 \)(2,400) $0 Cash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Amount of Revenue (Expense) for May Requirements 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. 2. After completing the table, calculate the amount of net income or net loss for Chef ’s Catering under the accrual basis and cash basis accounting systems for May. 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Chef ’s Catering? Why?
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