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Adjusting Entries Review Activity Use the list of accounts shown below when you are asked about accounts to use for the journal entries. Situation 1 Your Trial Balance has $10,500 for SUPPLIES. You counted the supplies and have determined that supplies valued at only $9,050 are left. Calculate the dollar amount of SUPPLIES USED. What is the adjusting entry? Indicate the Debit, the debit amount, and then the credit, and credit amount. What is the dollar amount of Supplies used? 1. What is the amount that is debited? 2. What is the amount that is credited? 3. What is the account that is debited? 4. What is the account that is credited? Situation 2 Your beginning balance for SUPPLIES is $2,000. Your ending balance for SUPPLIES is $750. If no SUPPLIES were purchased during the month, what is the dollar amount of SUPPLIES used for the month? What is the dollar amount of SUPPLIES used for the month? Situation 3 Your Trial Balance reports $2,200 for SUPPLIES. You have $1,800 of SUPPLIES on hand. What is the adjusting entry that is needed? Refer to the list of accounts at the top of page 1 for the choices. Indicate the account that will be debited. Indicate the account that will be credited. Indicate the amount that will be debited. Indicate the amount that will be credited. What SUPPLIES amount appears on the Balance Sheet? What SUPPLIES EXPENSE amount will appear on the Income Statement? Situation 4 In January, you prepaid $1,800 for six months of Insurance. What is the Insurance cost/expense each month? It is now the end of January, and you are completing your monthly adjusting entries or adjustments. Which accounts from the list of accounts at the top of the handout are used for this Insurance adjusting entry and what amount is used? 1. Which account is used for the debit portion of this insurance adjustment? 2. Which account is used for the credit portion of this insurance adjustment? 3. Which amount is used for the debit portion of this insurance adjustment? 4. Which amount is used for the credit portion of this insurance adjustment? Situation 5 You prepaid $2,400 for 3 months of Rent. One month has expired. Using the list of accounts on your handout, what is the adjusting entry or adjustment for expired Rent? 1. What is the account that will be debited for this adjusting entry for expired Rent? 2. What is the account that will be credited for this adjusting entry for expired Rent? 3. What is the amount that will be debited for this adjusting entry for expired Rent? 4. What is the amount that will be credited for this adjusting entry for expired Rent? 2 Situation 6 You purchased $2,400 of Office Furniture that has a useful life of 6 years. The residual value for this furniture is $300. Using straightline depreciation, calculate the annual depreciation and the monthly depreciation. Round your amounts to 2 decimals. Annual Depreciation =$ Monthly Depreciation =$ Situation 7 Recording depreciation is an adjusting entry. Examine the list of accounts on your handout. Based on Chapter 4 information, answer the following questions: 1. Using the list of accounts on the handout, which two fixed or long-term accounts ARE NOT used in adjusting entries for depreciation. 2. What two accounts from the list of accounts ARE USED for the adjusting entry for this Office furniture depreciation? 3. On which financial statement does the account called Depreciation Expense, Office Furniture appear? 4. What is the classification of the Depreciation Expense, Office Furniture account? 5. On which financial statement does the account called Accumulated Depreciation, Office Furniture appear? 6. What is the classification of the Accumulated Depreciation, Office Furniture account? Situation 8 You purchased Computer Equipment worth $3,300 that has a residual value of $300. The useful life of the computer is 5 years. Calculate the annual depreciation and the monthly depreciation, Round your answers to 2 decimal places. Answer the following questions based on this above information. 1. What is the annual depreciation? 2. What is the monthly depreciation? 3. What is the account that is debited for the monthly adjusting entry? 4. What is the account that is credited for the monthly adjusting entry? 5. What is the amount that is debited for the monthly adjusting entry? 6. What is the amount that is credited for the monthly adjusting entry? Situation 9 The accounting period ended on Tuesday: however, you pay your employees for the five-day work week on Fridays. Two days of wages are an expense for the current period. The weekly pay for all your employees is $5,000. Answer the following questions about this situation: 1. What is the Wage Expense for a single day? 2. What amount represents the Wages Expense for the two-day period? 3. In the adjusting entry, what is the account that will be debited? 4. What is the amount that will be debited in the adjusting entry? 5. In the adjusting entry, what is the account that will be credited? 6. What is the amount that will be credited in the adjusting entry? Situation 12 What Accounting Principle (not system or method of accounting) is followed by matching the revenue and expenses for the accounting period? See Chapter 4 for this answer. - Cash Accounting System - Accrual Accounting System - Matching Principle