You are now asked to journalize and post the adjusting entries after completing the worksheet. This is because, in the manual accounting system, the worksheet is not part of the journals and ledgers. Therefore completing the Adjustments column in the worksheet does not automatically update the appropriate ledger accounts. Since this practice set is a manual accounting practice set, you are still required to manually journalize the adjusting entries and post them to the general ledger as a separate step.

The purpose of adjusting entries is to ensure that the general ledger account balances reflect the revenues earned and expenses incurred during the accounting period.

Remember that the details of the end of month adjustments for June are as follows:

• Office Furniture owned by the business: original purchase price was $7,000, estimated useful life was 6 years, and estimated residual value was $1,000 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.
• Office Equipment owned by the business: original purchase price was $51,000, estimated useful life was 10 years, and estimated residual value was $6,000 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.
• The water usage for the month of June is estimated to be $1,155.
• The estimated electricity payable as at the end of June is $303.
• Sales staff work every single day during the week including weekends and are paid on a weekly basis. Wages were last paid up to and including 24 June. Wages incurred after that day (from June 25 to June 30 inclusive) are estimated to have been $310 per day.
• Interest expense incurred during the month of June but not yet paid to Earth Bank for the bank loan is $200.
• Office supplies totaling $3,944 are still on hand at June 30.
• One month of prepaid rent expired during June. Remember that at the beginning of June, the business paid two month's worth of rent in advance.
• 3 months of advertising remained pre-paid at the start of June.
• 5 months of insurance remained pre-paid at the start of June.

When calculating the portion of prepayments that expire during the month of June, you are asked to assume that an equal amount of expense is incurred per month.

After taking a physical count of inventory at the end of the month, the balance of inventory on hand as at June 30 is found to be equal to the closing balance of the Merchandise Inventory account. This means there is no adjusting entry required for inventory shrinkage.

Instructions for adjusting entries

1)Use the worksheet to assist you in recording the adjusting entries in the general journal.

2)Post the adjusting entries from the general journal to the general ledger accounts.

3)Record the final adjusted balance of each ledger account in the Adjusted Balance row of each ledger, even for ledgers with a balance of zero. Although each ledger already has a running balance, the Adjusted Balance row must still be filled out in order to receive full points.

GENERAL JOURNAL Date Account and Explanation Post Ref. Debit Credit Jun 30 (select) (select) Jun 30 (select) (select) Jun 30 (select) (select) Jun 30 select) (select) Jun 30 (select) (select) Jun 30 (select) (select) Jun 30 (select) (select) Jun 30 (select) (select) Jun 30 (select) (select) Jun 30 (select) (select) GENERAL LEDGER Account: Office Supplies Account No. 130 Date Ref. Debit Credit Balance Description 31 Balance May 3,981 DR Jun 5 Cash purchase CPJ 401 4,382 DR Jun 30 Jun 30 Jun 30 4 Jun 30 Adjusted Balance Account: Prepaid Rent Account No. 140 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 1 Prepaid rent CPJ 9,500 9,500 DR Jun 30 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Prepaid Advertising Account No. 141 Date Description Ref. Debit Credit Balance May 31 Balance 12,000 DR Jun 30 4 Jun 30 4 Jun 30 4 Jun 30 Adjusted Balance Account: Prepaid Insurance Account No. 142 Date Description Ref. Debit Credit Balance May 31 Balance 4,200 DR Jun 30 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Accum Depn: Office Furniture Account No. 151 Date Description Ref. Debit Credit Balance May 31 Balance 1,083 CR Jun 30 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Accum Depn: Office Equipment Account No. 161 Date Description Ref. Debit Credit Balance May 31 Balance 16,875 CR Jun 30 Jun 30 OOOO Jun 30 Jun 30 Adjusted Balance Account: Wages Payable Account No. 220 Date Description Ref. Debit Credit Balance May 31 Balance 1,194 CR Jun 4 Paid staff wages CPJ 1,194 0 Jun 30 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Electricity Payable Account No. 221 Date Description Ref. Debit Credit Balance May 31 Balance 917 CR Jun 7 Paid electricity bill CPJ 854 63 CR Jun 30 Jun 30 OOO. Jun 30 Jun 30 Adjusted Balance Account: Water Payable Account No. 222 Date Description Ref. Debit Credit Balance May 31 Balance 1,120 CR Jun 30 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Interest Payable Account No. 225 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Jun 30 Jun 30 4 Jun 30 Adjusted Balance Account: Interest Revenue Account No. 403 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Interest received from the bank GJ 585 585 CR Jun 30 Jun 30 iii Jun 30 Jun 30 Adjusted Balance Account: Advertising Expense Account No. 511 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 4 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Wages Expense Account No. 516 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Total from cash payments journal CPJ 7,438 7,438 DR Jun 30 Jun 30 OLOOT Jun 30 Jun 30 Adjusted Balance Account: Rent Expense Account No. 540 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Jun 30 Jun 30 4 Jun 30 Adjusted Balance Account: Electricity Expense Account No. 541 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Jun 30 OOOO Jun 30 Jun 30 Adjusted Balance Account: Water Expense Account No. 542 Date Ref. Debit Credit Balance Description 31 Balance May 0 Jun 30 Jun 30 vidi Jun 30 4 Jun 30 Adjusted Balance Account: Insurance Expense Account No. 543 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Jun 30 oud Jun 30 Jun 30 Adjusted Balance Account: Office Supplies Expense Account No. 544 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Depn Expense: Office Furniture Account No. 560 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 DLL Jun 30 Jun 30 Jun 30 Adjusted Balance 4 Account: Depn Expense: Office Equipment Account No. 561 Date Description Ref. Debit Credit Balance May 31 Balance 0 Jun 30 DOU. Jun 30 Jun 30 Jun 30 Adjusted Balance Account: Interest Expense Account No. 571 Date Ref. Debit Credit Balance Description 31 Balance May 0 Jun 30 4 Jun 30 Jun 30 Jun 30 Adjusted Balance 4