Learning Objective 3 Journalizing adjusting entries and subsequent journal entri
ID: 2411369 • Letter: L
Question
Learning Objective 3 Journalizing adjusting entries and subsequent journal entries Lopez Landscaping has the following data for the December 31 adjusting entries: P3-39B a. Each Friday, Lopez pays employees for the current week's work. The amount of the weekly payroll is $6,500 for a five-day workweek. This year, December 31 falls on a Wednesday. Lopez will pay its employees on January 2 covers two years, $7,500. purchased office supplies for $5,800, and at December 31 the office supplies on b. On January 1 of the current year, Lopez purchases an insurance policy that c. The keginning balance of Office Supplies was $3,700. During the year, Lopez hand total $3,000. d. During December, Lopez designed a landscape plan and the client prepaid $6,000. Lopez recorded this amount as Unearned Revenue. The job will take several months to complete, and Lopez estimates that the company has earned 70% of the total revenue during the current year. e. At December 31, Lopez had earned $7,500 for landscape services completed for f. Depreciation for the current year includes Equipment, $3,800; and Trucks, & Lopez has incurred $250 of interest expense on a $350 interest payment due on Tomball Appliances. Tomball has stated that it will pay Lopez on January 10. $1,400. lanuarv 15.Explanation / Answer
Answer
Transaction no.
Accounts title & Explanation
Debit
Credit
a.
Salaries & Wages expense
$ 4,020.00
Salaries & Wages payable
$ 4,020.00
[$6500 for 5 days. Days payable in jan = 2 days, No. of days for which salaries accrued = 5 - 2 =3 days. Adjustment = 6700 x 3/5
a. SUBSEQUENT Entry next year Jan-02
Salaries & Wages expense
$ 2,680.00
Salaries & Wages payable
$ 4,020.00
Cash
$ 6,700.00
( 5 days salaries paid)
b.
Insurance expense
$ 3,750.00
Prepaid Insurance
$ 3,750.00
$7500 is for 2 year. Insurance expired till 31 Dec for this year = 7500 x (1year/2years)
c.
Office Supplies expense
$ 6,500.00
Office Supplies
$ 6,500.00
Adjustment = supplies consumed = Beginning balance + purchases - ending balance. 3700 + 5800 - 3000 = 6500
d.
Unearned revenue
$ 4,200.00
Revenue Earned
$ 4,200.00
Revenue earned during current year = 70% of $6000 = 6000 x 70% = 4200
d. SUBSEQUENT Entry next year
Unearned revenue
$ 1,800.00
Revenue Earned
$ 1,800.00
Revenue earned during next year = 30% of $6000 = 6000 x 30% = 1800
e.
Accounts Receivables
$ 7,500.00
Revenue Earned
$ 7,500.00
Revenue earned recorded on accounts
f.
Depreciation expense - Equipment
$ 3,800.00
Depreciation expense - Truck
$ 1,400.00
Accumulated Depreciation - Equipment
$ 3,800.00
Accumulated Depreciation - truck
$ 1,400.00
Depreciation expenses for the year recorded.
g.
Interest expense
$ 250.00
interest payable
$ 250.00
Interest expenses accrued recorded
g. SUBSEQUENT Entry next year 15-Jan
Interest expense
$ 100.00
interest payable
$ 250.00
Cash
$ 350.00
Interest paid in cash
Transaction no.
Accounts title & Explanation
Debit
Credit
a.
Salaries & Wages expense
$ 4,020.00
Salaries & Wages payable
$ 4,020.00
[$6500 for 5 days. Days payable in jan = 2 days, No. of days for which salaries accrued = 5 - 2 =3 days. Adjustment = 6700 x 3/5
a. SUBSEQUENT Entry next year Jan-02
Salaries & Wages expense
$ 2,680.00
Salaries & Wages payable
$ 4,020.00
Cash
$ 6,700.00
( 5 days salaries paid)
b.
Insurance expense
$ 3,750.00
Prepaid Insurance
$ 3,750.00
$7500 is for 2 year. Insurance expired till 31 Dec for this year = 7500 x (1year/2years)
c.
Office Supplies expense
$ 6,500.00
Office Supplies
$ 6,500.00
Adjustment = supplies consumed = Beginning balance + purchases - ending balance. 3700 + 5800 - 3000 = 6500
d.
Unearned revenue
$ 4,200.00
Revenue Earned
$ 4,200.00
Revenue earned during current year = 70% of $6000 = 6000 x 70% = 4200
d. SUBSEQUENT Entry next year
Unearned revenue
$ 1,800.00
Revenue Earned
$ 1,800.00
Revenue earned during next year = 30% of $6000 = 6000 x 30% = 1800
e.
Accounts Receivables
$ 7,500.00
Revenue Earned
$ 7,500.00
Revenue earned recorded on accounts
f.
Depreciation expense - Equipment
$ 3,800.00
Depreciation expense - Truck
$ 1,400.00
Accumulated Depreciation - Equipment
$ 3,800.00
Accumulated Depreciation - truck
$ 1,400.00
Depreciation expenses for the year recorded.
g.
Interest expense
$ 250.00
interest payable
$ 250.00
Interest expenses accrued recorded
g. SUBSEQUENT Entry next year 15-Jan
Interest expense
$ 100.00
interest payable
$ 250.00
Cash
$ 350.00
Interest paid in cash
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