"The only place where success comes before workis in dictionary"Vidal Sassoon
No Cellphone
Principles Of Accounting (1)
Chapter 3
Adjusting the Accounts
Mohamed Mahmoud
mmahmoud@eelu.edu.eg
Tel: (+202) 33318449
Exercises
1.Trail Balance
Exercise 1
Prepare journal entries for each of the following transactions.
Performed services for customers on account $5,...
a.
Accounts Receivable.................................................................. 5,000
                           ...
Exercise 1 (Continued)
The ledger account balances for Elnoory Company are listed below.
Accounts Payable    $ 8,000      ...
b.
El-Noory Company
Trial Balance
December 31, 2009
                                                                      ...
Exercise 2
Answers
Cash
Account Receivable
Supplies
Answers (Continued)
Accounts Payable
Unearned Revenue
Jane Kent, Capital
Answers (Continued)
Service Revenue
Salaries Expense
Rent Expense
Answers (Continued)
JANE KENT, CPA
Trial Balance
	May 31, 2009
___________________________	___  ___________
DebitCredit
Ca...
2.Adjusting Entries
Deferrals
Accruals
1.Prepaid Expenses.Expenses paid in cash and recorded as assets before they are use...
2.Adjusting Entries (Continued)
Exercise 3
Prepare adjusting entries for the following transactions. Omit explanations
Depreciation on equipment is $800 f...
Answers
Depreciation Expense...................................................................... 800
                   ...
Exercise 3 (Continued)
Hans Albert Enterprises purchased computer equipment on May 1, 2009 for $4,500. The company expects...
Answers
Depreciation Expense ........................................................... 125
                             ...
Exercise 4
On January 1, Anita received a $9,000 cash retainer for legal services The full amount was credited to the liab...
Answer
Fees earned per month= $9,000/3 = $3,000
Unearned Revenue.................................................. 3,000
 ...
Section 3
Section 3
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Excerises on Chapter 3: Adjusting the acccounts

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Section 3

  1. 1. "The only place where success comes before workis in dictionary"Vidal Sassoon
  2. 2. No Cellphone
  3. 3. Principles Of Accounting (1) Chapter 3 Adjusting the Accounts Mohamed Mahmoud mmahmoud@eelu.edu.eg Tel: (+202) 33318449
  4. 4. Exercises
  5. 5. 1.Trail Balance
  6. 6. Exercise 1 Prepare journal entries for each of the following transactions. Performed services for customers on account $5,000. Purchased $20,000 of equipment on account. Received $3,000 from customers in transaction 1. The owner, Mohammad Obayd, withdrew $1,000 cash for personal use.
  7. 7. a. Accounts Receivable.................................................................. 5,000 Service Revenue......................................................................... 5,000 Equipment................................................................................ 20,000 Accounts Payable......................................................................... 20,000 Cash .......................................................................................... 3,000 Accounts Receivable................................................................... 3,000 Mohamed, Drawings ..…………………………….…………………………….1,000 Cash……………………………………………….....………………………………………1,000
  8. 8. Exercise 1 (Continued) The ledger account balances for Elnoory Company are listed below. Accounts Payable $ 8,000 Accounts Receivable 7,000 Cash 13,000 Elnoory, Capital 11,000 Elnoory, Drawing 4,000 Repair Revenue 40,000 Salaries Expense 25,000 Unearned Revenue 2,000 Utilities Expense 12,000 Instructions:- Prepare a trial balance in proper form for Elnoory at December 31, 2009.
  9. 9. b. El-Noory Company Trial Balance December 31, 2009 Debit Credit Cash $13,000 Accounts Receivable 7,000 Accounts Payable $ 8,000 Unearned Revenue 2,000 Elnoory, Capital 11,000 Elnoory, Drawing 4,000 Repair Revenue 40,000 Salaries Expense 25,000 Utilities Expense 12,000 _______ $61,000 $61,000
  10. 10. Exercise 2
  11. 11. Answers Cash Account Receivable Supplies
  12. 12. Answers (Continued) Accounts Payable Unearned Revenue Jane Kent, Capital
  13. 13. Answers (Continued) Service Revenue Salaries Expense Rent Expense
  14. 14. Answers (Continued) JANE KENT, CPA Trial Balance May 31, 2009 ___________________________ ___ ___________ DebitCredit Cash $25,800 Accounts Receivable 2,100 Supplies 2,500 Accounts Payable $ 1,500 Unearned Revenue 3,500 Jane Kent, Capital 25,000 Service Revenue 3,300 Salaries Expense 2,000 Rent Expense 900              $33,300$33,300
  15. 15. 2.Adjusting Entries Deferrals Accruals 1.Prepaid Expenses.Expenses paid in cash and recorded as assets before they are used or consumed. 3. Accrued Revenues. Revenues earned but not yet received in cash or recorded. 4. Accrued Expenses. Expenses incurred but not yet paid in cash or recorded. 2. Unearned Revenues. Revenues received in cash and recorded as liabilities before they are earned.
  16. 16. 2.Adjusting Entries (Continued)
  17. 17. Exercise 3 Prepare adjusting entries for the following transactions. Omit explanations Depreciation on equipment is $800 for the accounting period. There was no beginning balance of supplies and purchased $500 of office supplies during the period. At the end of the period $80 of supplies were on hand. Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $600 was unexpired.
  18. 18. Answers Depreciation Expense...................................................................... 800 Accumulated Depreciation—Equipment.................................. 800 Supplies Expense ............................................................................ 420 Supplies .................................................................................. 420 ($500 – $80) Rent Expense................................................................................... 400 Prepaid Rent ........................................................................... 400 ($1,000 – $600)
  19. 19. Exercise 3 (Continued) Hans Albert Enterprises purchased computer equipment on May 1, 2009 for $4,500. The company expects to use the equipment for 3 years. What adjusting journal entry should the company make at the end of each month if monthly financials are prepared (annual depreciation is $1,500)? What is the book value of the equipment at May 31, 2009?
  20. 20. Answers Depreciation Expense ........................................................... 125 Accumulated Depreciation............................................... 125   2. Cost $4,500 Accumulated Depreciation (125) Book value$4,375
  21. 21. Exercise 4 On January 1, Anita received a $9,000 cash retainer for legal services The full amount was credited to the liability account: Unearned Revenue. Assuming that the revenue is earned ratably over the 3-month period, what adjustingjournal entry should be made at January 31?
  22. 22. Answer Fees earned per month= $9,000/3 = $3,000 Unearned Revenue.................................................. 3,000 Fees Earned..................................................................... 3,000

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