The followng, among others, are items for adjustment: a. merchandise inventory c

Question

The followng, among others, are items for adjustment:
a. merchandise inventory counted and properly costed at 44,100 b. Inventory of unused office supplies, 126. C. The prepaid rent was for the months of December 2007, and January, 2008. E. Accrued Utility Expenses- 457.60

No Seryice :11 PM Journal Entry will be as follows office Equipment E Nevalita, Capita 3 Dec Miscellaneous Expense 13 14 15 16 17 ax and Licences -Dec Miscellaneous 19 21 5-Dec Purchases Accounts Payable 23 24 25 26 27 8-Dec Purchases 370. Purchase Returns 30 31 32 10-Dec Advertising Expense 13-Dec Accounts Receivable 36 37 14-Dec Account Payable 42 43 16-Dec Office Equipment 45 22-Dec Cash 22-Dec Cash Accounts Receivables 51 53 29-Dec Cash 57 59 1-DecE.Navalta, Withdrawal 61 62

Explanation / Answer

Workings:

b. Office Equipment as at Dec 2 = $50000

  Office Equipment as at Dec 16 = $40000

Remaining Office Supplies = $126

Ie- Supplies Expenses = 50000 + 40000 - 126 = $89874

c. Prepaid Expenses for 2 months is $5000

Hence for 1 months of Expenses (December) that is incurred = 5000 / 2 = $2500

Adjusting Journal Entries Date Account Debit Credit a. 31 Dec Merchandise Inventory 44100 To Cost of Goods Sold 44100 b. 31 Dec Office Supplies Expenses 89874 To Office Supplies 89874 c. 31 Dec Rent Expenses 2500 To Prepaid Rent 2500 d. 31 Dec Utility Expenses 457.60 To Utility Payable 457.60

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