Adjusting Entries Instructions Chart of Accounts General Journal Instructions The following are several transactions of Ardery Company that occurred during the current year and were recorded in permanent (that is, balance sheet) accounts unless indicated otherwise. Date Transaction Apr 1 Purchased a delivery van for $14,000, paying $1,000 down, and issuing a 1-year, 12% note payable for the $13,000 balance. It is estimated that the van has a 4-year life and an $800 residual value; the company uses straight-line depreciation. The interest on the note will be paid on the maturity date. Purchased $800 of office supplies. Purchased a 2-year comprehensive insurance policy for $1,200. May 15 June 2 Aug. 1 Received 6 months' rent in advance at $250 per month and recorded the $1,500 receipt as Rent Revenue. Sept. 15 Advanced $600 to sales personnel to cover their future travel costs. Nov. 1 Accepted a $3,000, 6-month, 12% (annual rate) note receivable from a customer, the interest to be collected when the note collected The following information also is available: 1. On January 1, the Office Supplies account had a $250 balance. On December 31, an inventory count showed $200 of office supplies on hand. 2. The weekly (5-day) payroll of Ardery Company amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day accrual is required for the current year. 3. Sales personnel travel cost reports indicate that $500 of advances had been used to pay travel expenses. 4. The income tax rate is 30% on current income and is payable in the first quarter of next year. The pretax income before the adjusting entries is $8,655. Required: On the basis of the above information, prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31. CHART OF ACCOUNTS Ardery Company General Ledger REVENUE ASSETS 111 Cash 411 Sales Revenue 421 Rent Revenue 431 Interest Revenue 121 Accounts Receivable 122 Advances to Sales Personnel 141 Inventory 152 Prepaid Insurance 155 Office Supplies 157 Interest Receivable 181 Equipment 189 Accumulated Depreciation EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 536 Office Supplies Expense 540 Interest Expense 541 Depreciation Expense 557 Selling Expenses LIABILITIES 211 Accounts Payable 224 Interest Payable 231 Salaries Payable 152 Prepaid Insurance 155 Office Supplies 157 Interest Receivable 181 Equipment 189 Accumulated Depreciation EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 536 Office Supplies Expense 540 Interest Expense 541 Depreciation Expense 557 Selling Expenses 559 Miscellaneous Expenses 910 Income Tax Expense LIABILITIES 211 Accounts Payable 224 Interest Payable 231 Salaries Payable 250 Unearned Rent 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings PAGE 1 GENERAL JOURNAL DATE POST. REF. DEBIT CREDIT ACCOUNT TITLE Adjusting Entries 1 2 Apr. 1 3 4 5 6 7 8 9 10 10 11 12 13 14 15 16 17 18 19