Adjusting Journal Entries

1. Notice that two Accrued-Payroll-Payable accounts are in the ledger and have a non-zero balance from the prior year. This represents the sum of the pay performed as of 30 December of the prior year but not yet paid. At the end of the current year, workers again have worked a few days for which they have not yet been paid. This amounts to $6,000 for General Payroll and $4,000 for Factory Payroll.

2. On 31 December, Supplies Inventory was physically counted and found to be $23,000.

3. Record an appropriate amount of insurance expense for the year. Until 30 March of the current year, the automobiles were insured under a prior policy for $1,000 per month. See CYJE #9 for the new policy.

4. Record an appropriate amount of rent expense on the metal cutter mentioned in CYJE 12.

5. Record an appropriate amount of interest expense on the note payable used to finance the purchase of equipment in CYJE 11. The Note Payable plus accrued interest is due 30 July of the next year. The note was signed and began accruing interest on 1 August of the current year. No cash payments were required during the current year but the note does accrue simple interest at 0.5% per month. This interest is added to the balance of the note so that when cash settlement is made, it will include all interest charges.

6. The company has received utility bills totaling $37,000 which is has not yet paid as of 30 December. Note that there is a beginning balance in Utilities Payable Account.

7. Record an appropriate amount of depreciation expense for each of the companys three (3) fixed asset accounts. See accounting policy #1. 8. Record an appropriate amount of amortization expense for the companys intangible assets.

9. Record an appropriate amount of bad debt expense. See accounting policy #7.

10. Record an appropriate amount of income tax expense. The Tax Accountant estimates that the Company owes $300,000 in income taxes for the current year. Income tax expense was determined to be 30% of net income before taxes. This is a different amount. What is the difference between tax expense and taxes paid?