Cesar Mahusay operates an accounting firm and needs to make adjustments to various accounts in the trial balance as of December 31, 2018. These include recognizing unused supplies, prepaid insurance, depreciation on office equipment, unearned rental income, uncollected service income, interest on a note receivable, estimated bad debts, and accrued salaries.
Cesar Mahusay operates an accounting firm and needs to make adjustments to various accounts in the trial balance as of December 31, 2018. These include recognizing unused supplies, prepaid insurance, depreciation on office equipment, unearned rental income, uncollected service income, interest on a note receivable, estimated bad debts, and accrued salaries.
Cesar Mahusay operates an accounting firm and needs to make adjustments to various accounts in the trial balance as of December 31, 2018. These include recognizing unused supplies, prepaid insurance, depreciation on office equipment, unearned rental income, uncollected service income, interest on a note receivable, estimated bad debts, and accrued salaries.
Cesar Mahusay operates an accounting firm and needs to make adjustments to various accounts in the trial balance as of December 31, 2018. These include recognizing unused supplies, prepaid insurance, depreciation on office equipment, unearned rental income, uncollected service income, interest on a note receivable, estimated bad debts, and accrued salaries.
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Cesar Mahusay operates an accounting firm.
Shown below are selected accounts that
appear in the Preliminary Trial Balance as of Dec. 31, 2018, and require adjustment.
ACCOUNTS RECEIVABLE P 22,500
ALLOWANCE FOR 1,200 IMPAIRMENT LOSS
NOTES RECEIVABLE 20,000
OFFICE EQUIPMENT 92,000
ACCUMULATED 4,500 DEPRECIATION
RENTAL INCOME 12,000
SERVICE INCOME 450,000
SUPPLIES EXPENSE 6,250
INSURANCE EXPENSE 7,200
SALARIES EXPENSE 120,000
The following adjustments are to be made:
1. Unused office supplies at the end, P 320
2. One year insurance was paid on April 1 of the current year 3. Office equipment has a useful life of 10 years with a salvage value of P 2,000. It was acquired in July 2018. 4. Unearned rental income is 1/3 of the amount collected 5. Service income not yet collected P 3,000 6. The 60 days 6% note was received on Dec.1 7. Estimated Bad Debts is 10 % of the Accounts Receivable 8. Accrued salaries P 12,000.
Instruction: Prepare the necessary adjusting entries to arrive at the adjusted balances for the accounts. Use these adjusted balances in answering the questions. You have 30 minutes to work on the adjustments and 10 minutes to answer the questions.
