What are the adjusting entries for the following? Jackson estimates that the com

Question

What are the adjusting entries for the following?

Jackson estimates that the company will pay an income tax rate of 11%.

These are the orginial events that took place, and their journal entries

Declared and paid dividends of $1,000 cash.

There are no opening balances

1 Accrue interest expense on the note assuming that the date of the loan was January 2 (use 30/360 and round to the nearest dollar). 2 Supplies on hand at January 31 total $200. 3 Assume that all of the equipment was purchased at the beginning of January. Record January depreciation expense using the straight-line method (round to the nearest dollar). 4 The cash advance is earned ratably over the 5-month period. 5 The company has earned $330 of revenue that has not yet been billed to customers. 6 Jackson pays its employees on the first of every month. Salaries earned during the month of January total $2,060. 7 On January 29, Jackson received the current month's utility bill for $150. The bill is due on February 16. 8

Jackson estimates that the company will pay an income tax rate of 11%.

Explanation / Answer

Adjusting Entries

Assumptions

No accumulated dereciation is maintained.

Workings

A) Depreciation

Equipment 1: (7200-1200)/3*1/12 = 167

Equipment 2 : (1350+1500-450)/5*1/12 = 40

B) Interest Expense

5000*10%*1/12 = 42

Date Particulars Debit Credit 31-Jan Interest Expense Dr 42 To Interest Payable 42 Profit and Loss a/c Dr 42 To Interest expense a/c 42 31-Jan Closing Stock a/c Dr 200 To Trading account 200 31-Jan Depreciation Expense a/c Dr 207 To Equipment (1) 167 To Equipment (2) 40 Profit and Loss A/c Dr 207 To Depreciation Expense 207 31-Jan Unearned Service Revenue a/c Dr 1025 To Service Revenue 1025 Service Revenue a/c Dr 1025 To Profit and Loss a/c 1025 31-Jan Accrued Revenue a/c Dr 330 To Service Revenue 330 Service Revenue a/c Dr 330 To Profit and Loss a/c 330 31-Jan Accrued Salaries a/c Dr 2060 To Salary A/c 2060 Profit and Loss a/c Dr 2060 To Salaries A/c 2060 31- Jan Utilities expense a/c Dr 150 To Accrued Utilities a/c 150 Profit and Loss a/c Dr 150 To Utilities Expense a/c 150 31-Jan Income Tax a/c Dr 2.31 To Income tax payable a/c 2.31

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