Question
On December 31, the following data were accumulated for preparing the adjusting entries for Bellingham Realty: The supplies account balance on December 31 is $1,375.
On December 31, the following data were accumulated for preparing the adjusting entries for Bellingham Realty:
The supplies account balance on December 31 is $1,375. The supplies on hand on December 31 are $280. | |
The unearned rent account balance on December 31 is $9,000 representing the receipt of an advance payment on December 1 of four months rent from tenants. | |
Wages accrued but not paid at December 31 are $3,220. | |
Fees earned but unbilled at December 31 are $18,750. | |
Depreciation of office equipment is $2,900. |
Required: | |
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1. | Journalize the adjusting entries required at December 31. Refer to the Chart of Accounts for exact wording of account titles. |
2. | What is the difference between adjusting entries and correcting entries? |
CHART OF ACCOUNTSBellingham RealtyGeneral Ledger
ASSETS | |
---|---|
11 | Cash |
12 | Accounts Receivable |
13 | Supplies |
14 | Prepaid Insurance |
15 | Land |
16 | Office Equipment |
17 | Accumulated Depreciation-Office Equipment |
LIABILITIES | |
---|---|
21 | Accounts Payable |
22 | Unearned Rent |
23 | Wages Payable |
24 | Taxes Payable |
EQUITY | |
---|---|
31 | Common Stock |
32 | Retained Earnings |
33 | Dividends |
REVENUE | |
---|---|
41 | Fees Earned |
42 | Rent Revenue |
EXPENSES | |
---|---|
51 | Advertising Expense |
52 | Insurance Expense |
53 | Rent Expense |
54 | Wages Expense |
55 | Supplies Expense |
56 | Utilities Expense |
57 | Depreciation Expense |
59 | Miscellaneous Expense |
1. Journalize the adjusting entries required at December 31. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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1 | Adjusting Entries | |||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
9 | ||||||||
10 | ||||||||
11 |
2. What is the difference between adjusting entries and correcting entries?
a. Both adjusting entries and correcting entries are not a planned part of the accounting process.
b. Adjusting entries are a planned part of the accounting process, correcting entries are not planned but arise when necessary to correct errors.
c. Both adjusting entries and correcting entries are a planned part of the accounting process.
d. Correcting entries are a planned part of the accounting process, adjusting entries are not planned but arise when necessary to adjust errors.
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