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LO3 Adjustment for supplies used: debit Supplies Expense and credit Supplies. Adjustment for expired insurance: debit...

LO3

Adjustment for supplies used: debit Supplies Expense and credit Supplies.

Adjustment for expired insurance: debit Insurance Expense and credit Prepaid Insurance.

Adjustment for depreciation: debit Depreciation Expense and credit Accumulated Depreciation.

Adjustment for accrued wages: debit Wages Expense and credit Wages Payable.

Complete the work sheet for Sheila's Salon for the month of November. Adjustment information:

(a) Depreciation of equipment for the month of November, $750.
(b) Accrued wages owed at the end of November, $325.
(c) Supplies used during November, $300.
(d) Insurance expired during November, $200.
Sheila's Salon
Work Sheet
For Month Ended November 30, 20-
TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE
ACCOUNT NAME DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT
Cash 7,525
Supplies 1,050
Prepaid Insurance 1,500
Equipment 5,080
Accumulated Depreciation, Equipment 1,225
Accounts Payable 2,730
S. Smith, Capital 9,779
S. Smith, Drawing 2,000
Service Fees 5,836
Rent Expense 1,040
Supplies Expense 415
Wages Expense 885
Miscellaneous Expense 75
Depreciation Expense, Equipment
Wages Payable
Insurance Expense
19,570 19,570

LO4

Adjustments are a way of updating the ledger accounts. They are determined after the trial balance has been prepared. To change the balance of the ledger accounts, adjusting entries are needed in the general journal as evidence of the changes. The information for these entries are taken directly from the Adjustments columns of the work sheet, debiting and crediting the same accounts and amounts in the journal entries. Therefore, each adjusting entry consists of an income statement account and a balance sheet account. When the adjusting entries are posted to the ledger accounts, the abbreviation Adj. is written in the Item column of the ledger account.

Journalize and post the adjusting entries for Sheila's Salon from Practice Exercise 3. If an amount box does not require an entry, leave it blank or enter "0". Journalize the adjustments in the order given in the question.

Journalize the adjustments in the order given in the question.

GENERAL JOURNAL PAGE 1
DATE DESCRIPTION POST. REF. DEBIT CREDIT
20--
Nov. 30
      
Nov. 30
      
Nov. 30
      
Nov. 30
      
GENERAL LEDGER
ACCOUNT Supplies ACCOUNT NO. 141
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 15 Balance J1 1,050 1,050
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Prepaid Insurance ACCOUNT NO. 145
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 15 Balance J1 1,500 1,500
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Accumulated Depreciation, Equipment ACCOUNT NO. 185.1
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Wages Payable ACCOUNT NO. 219
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Wages Expense ACCOUNT NO. 511
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 15 Balance J1 885 885
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Supplies Expense ACCOUNT NO. 523
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 15 Balance J1 415 415
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Insurance Expense ACCOUNT NO. 535
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 30 Adjusting J5


GENERAL LEDGER
ACCOUNT Depreciation Expense, Equipment ACCOUNT NO. 541
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
20--
Nov. 30 Adjusting J5

LO5

The income statement is prepared directly from the amounts listed in the Income Statement Debit and Credit columns. The net income should equal the net income previously determined on the work sheet. For the statement of owner's equity, use the amount of the beginning capital listed in the Balance Sheet Credit column after checking the general ledger for any additional investment(s), the amount of the net income from the Balance Sheet Credit column, and the amount of Drawing from the Balance Sheet Debit column. Prepare the balance sheet directly from the amounts listed in the Balance Sheet Debit and Credit columns (except Drawing and Capital).

Prepare an income statement, a statement of owner's equity, and a balance sheet for Sheila's Salon using the information from Practice Exercise 3.

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ekkarill92 answered 2 years ago
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