Question

Prepare year end adjusting entries for these situations.

1. Accrued interest on notes payable is $80.

2. Income taxes incurred but not paid or recordered total to $1,000.

3. Legal fees of $5000 were received in advanced. By the end of the year, 80% of the fees were earned.

4. Services totaling $1,000 have been completed but not recorded or billed.

5. Payroll for the work week (five days) to be paid on Friday is $10,000. The year ends on a Wednesday.

6. Supplies available for use during the year total to $3,400. By the end of the year, there is only$1,700 in supplies remaining.

7. Depreciation for the year total to $3,000.

Answer 1

	Adjusting Entries
S.No.	Particular	Amount (Dr)	Amount(Cr)
1	Interest Expenses	$                               80.00
	To Interest Accrued		$                                       80.00
	(Being amount of accured interest on Note Payable)
2	Income Tax Expense	$                         1,000.00
	To Income Tax Payable		$                                 1,000.00
	(Being amount of Income Tax Expense paid but not recorded)
3	Unearned Legal Fees($5000*80%)	$                         4,000.00
	To Legal Fees Earned		$                                 4,000.00
4	(Being amount of Legal fees earned)
	Accounts Receivable	$                         1,000.00
	To Legal Fees Earned		$                                 1,000.00
	(Being amount of service completed but not billed)
5	Salaries Expenses	$                         6,000.00
	To Salaries Expenses Payable		$                                 6,000.00
	(Being amount due for 3 days Monday,Tueday and Wednesday at the rate of ($10000/5)=$2000 per day)
6	Supplies Expenses($3400-$1700)	$                         1,700.00
	To Spplies		$                                 1,700.00
	(Being amount of Supplies Expenses)
7	Depreciation expenses	$                         3,000.00
	To Accumulated Depreciation		$                                 3,000.00
	(Being amount of depreciation)