Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Option #2: Preparing Adjusting Entries, Closing Entries and a Post-Closing Trial Balance Complete Part 1 and Part 2. Part 1 Shown below is Johnson Travel

Option #2: Preparing Adjusting Entries, Closing Entries and a Post-Closing Trial Balance

Complete Part 1 and Part 2.

Part 1

Shown below is Johnson Travel Agencys adjusted trial balance as of the end of its annual accounting period:

Johnson Travel Agencys

Adjusted Trial Balance

December 31

Account Name

DR.

CR.

Cash

$ 52,000

Accounts receivable

18,900

Office equipment

31,500

Accumulated depreciationOffice equipment

$7,500

Notes payable

11,260

Capital stock

42,500

Dividends

2,500

Fees earned

98,000

Salaries expense

45,200

Rent expense

2,300

Depreciation expenseOffice equipment

3,160

Office supplies expense

3,700

Totals

$159,260

$159,260

(a) Prepare the necessary closing entries.

(b) Using the spreadsheet template provided, prepare a post-closing trial balance.

Part 2

Determine if the following transactions for Everon Corporation require an adjustment. If an adjusting entry is required, give the correct entry. Where applicable, write the original entry first and then the adjusting entry.

  1. At the beginning of the month, Everon agreed to perform services for the next four months for Maston, Inc. for $25,000 per month. Ford paid Michigan $100,000 cash in advance. One month has now passed.
  2. Everon pays its employees every two weeks. At the end of the month, Everon owes its employees $75,000 but will not pay them until the following week.
  3. Everon paid $60,000 cash for rent at the beginning of the month by debiting prepaid rent and crediting cash. This amount covered six months of occupancy, but only one month has passed.
  4. At the beginning of the year, Everon bought supplies from Douglas Implements for $4,500 cash per month for twelve months. A physical count at year-end revealed supplies worth $1,500 were still left over. Complete the original journal entry followed by the adjusting entry.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing

Authors: Thomas D. Hubbard, J. R. Johnson, Steve Johnson, Joel D. Hubbard

6th Edition

0873932609, 9780873932608

More Books

Students also viewed these Accounting questions

Question

3. What opportunities did Katrina offer the people of New Orleans?

Answered: 1 week ago