(only need the adjusting enties) The Bell wholesale company stared business on J
ID: 2334749 • Letter: #
Question
(only need the adjusting enties) The Bell wholesale company stared business on July 1, 2018, the following transactions too place in the month of July.
The owners invested $200,000 cash in the company in exchange for 5,000 shares of common stock.
Equipment is purchased for $30,000 on account.
On July 1, $12,000 rent on building is paid for the months of July, August, and September.
Merchandize inventory $40,000 is purchased on account. The company uses perpetual inventory system.
$20,000 is borrowed from a local bank, and a note payable is signed.
Credit sales for the month are $62,000, The cost of merchandize sold is $38,000.
$2,000 is paid on account for office supplies.
$55,000 is collected from customers on account.
$10,000 is paid to employees for wages in July.
A bill of $3,000 is received from utility company for the month of July.
A customer paid $9,000 for merchandize to be delivered in August and September.
The company paid $1,000 as dividend to its shareholders.
Solve for Bell’s adjustment entries based on the following information, then compete the excel spreadsheet through the adjustment entries columns.
The company anticipate $1,000 from the accounts receivable will not be collected.
Accrue interest expense for the notes payable in July based on transaction e, the interest rate is 6%.
Using the straight line depreciate method, recognize the depreciate expense for the equipment in July. Assume the useful life is 5 years and the residual value is $3,000.
Adjust the rent expense for the month of July based on transaction c.
Adjust the supplies expense for July assuming the ending supplies is $1,500.
Explanation / Answer
Date Account title and explanation Debit Credit 1 Bad debts expense 1000 Allowance for doubtful debts 1000 (To record uncollectibles) 2 Interest expense 100 Interest Payable 100 (To record interest expense) 3 Depreciation expense 450 (30000-3000)/60 Accumulated Depreciation - Equipment 450 (To record depreciation expense) 4 Rent expense 4000 Prepaid Rent 4000 (To adjust rent expense) 5 Supplies Expense 500 Supplies 500 (To record supplies expense)
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