Question

For each of the following separate situations, prepare the necessary adjustments (a) using the financial statement effects template and (b) in journal entry form.

1. Unrecorded depreciation on equipment is $1,220.
2. On the date for preparing financial statements, an estimated utilities expense of $780 has been incurred, but no utility bill has yet been received or paid.
3. On the first day of the current period, rent for four periods was paid and recorded as a $5,600 debit to Prepaid Rent and a $5,600 credit to Cash.
4. Nine months ago, The Hartford Financial Services Group sold a one-year policy to a customer and recorded the receipt of the premium by debiting Cash for $1,248 and crediting Unearned Premium Revenue for $1,248. No adjusting entries have been prepared during the nine-month period. Hartford's annual financial statements are now being prepared.
5. At the end of the period, employee wages of $1,930 have been incurred but not yet paid or recorded.
6. At the end of the period, $600 of interest income has been earned but not yet received or recorded.

(a) using the financial statement effects template

Balance Sheet Transaction Cash Asset + Noncash Assets - Contra Assets = Liabilities + Contributed Capital + Earned Capital (1) Adjusting entry for depreciation: equipment $Answer + $Answer - $Answer = $Answer + $Answer + $Answer (2) Adjusting entry for utilities expense Answer + Answer - Answer = Answer + Answer + Answer (3) Adjusting entry for rent expense Answer + Answer - Answer = Answer + Answer + Answer (4) Adjusting entry for premium revenues Answer + Answer - Answer = Answer + Answer + Answer (5) Adjusting entry for wage expense Answer + Answer - Answer = Answer + Answer + Answer (6) Adjusting entry for interest earned Answer + Answer - Answer = Answer + Answer + Answer

Income Statement Revenue - Expenses = Net Income $Answer - $Answer = $Answer Answer - Answer = Answer Answer - Answer = Answer Answer - Answer = Answer Answer - Answer = Answer Answer - Answer = Answer

(b) in journal entry form

General Journal

DescriptionDebitCredit(1)AnswerDepreciation Expense-EquipmentAccumulation Depreciation-EquipmentCashDepreciation PayableAnswerAnswer AnswerDepreciation Expense-EquipmentCashDepreciation PayableAccumulation Depreciation-EquipmentAnswerAnswer To record depreciation for the period.      (2)AnswerCashUtilities ExpenseUtilities PayableAccumulated UtilitiesAnswerAnswer AnswerUtilities ExpenseAccumulated UtilitiesCashUtilities PayableAnswerAnswer To record accrued utilities expense.      (3)AnswerAccumulated RentRent ExpensePrepaid RentCashAnswerAnswer AnswerPrepaid RentCashAccumulated RentRent ExpenseAnswerAnswer To record rent expense for the month.      (4)AnswerPremium RevenueUnearned Premium RevenueCashAccumulated RevenueAnswerAnswer AnswerPremium RevenueCashAccumulated RevenueUnearned Premium RevenueAnswerAnswer To record premium revenue earned.      (5)AnswerWages PayableCashWages ExpenseAccumulated WagesAnswerAnswer AnswerWages ExpenseCashAccumulated WagesWages PayableAnswerAnswer To record accrued wages at the end of the period.      (6)AnswerInterest ReceivableCashInterest IncomeAccumulated InterestAnswerAnswer AnswerCashInterest IncomeAccumulated InterestInterest ReceivableAnswerAnswer To accrue interest earned but not yet received.  

Answer 1