Comprehensive Problem 2 Part 4 and 6: Note: You must complete parts 1, 2 and 3 b

Question

Comprehensive Problem 2
Part 4 and 6:

Note: You must complete parts 1, 2 and 3 before attempting to complete part 4 and part 6. Part 5 is an optional work sheet.

6. Journalize the adjusting entries. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". Post the adjusting entries to the attached spreadsheet you used in parts 1 and 2.

DateDescriptionPost. Ref.DebitCredit Adjusting Entries   2014    May 31SelectAccounts ReceivableCashCost of Merchandise SoldIncome SummaryMerchandise InventoryItem 1    SelectCashCost of Merchandise SoldIncome SummaryMerchandise InventorySalesItem 3        May 31SelectAccounts PayableCashIncome SummaryInsurance ExpensePrepaid InsuranceItem 5    SelectAccounts PayableCashIncome SummaryInsurance ExpensePrepaid InsuranceItem 7        May 31SelectAccounts PayableCashCost of Merchandise SoldStore SuppliesStore Supplies ExpenseItem 9    SelectAccounts PayableCashMerchandise InventryStore SuppliesStore Supplies ExpenseItem 11        May 31SelectAccounts PayableAccumulated Depreciation-Store EquipmentCashDepreciation ExpenseStore EquipmentItem 13    SelectAccounts PayableAccumulated Depreciation-Store EquipmentCashDepreciation ExpenseStore EquipmentItem 15        May 31SelectAccounts PayableCashIncome SummarySales Salaries ExpenseSalaries PayableItem 17    SelectCashAccounts PayableIncome SummaryOffice Salaries ExpenseSalaries PayableItem 20    SelectCashIncome SummaryOffice Salaries ExpenseSales Salaries ExpenseSalaries PayableItem 23   

Explanation / Answer

. At the end of May, the following adjustment data were assembled

a.Merchandise inventory on hand 550,000

You didn't say what was the Merchandise balance before the adjustment. Let's say it was $555,000. Your adjustment shd be for the difference

Dr Merchandise expense $5000
Cr Merchandise $5000

b.Store Supplies on hand on May 31 are $4,000

You didn't say what was the supplies balance before the adjustment. Let's say it was $4,500. Your adjustment shd be for the difference.

Dr Supplies expense $500
Cr Supplies $500

c. Insurance expired during May is $12,000
Dr Insurance expense $12,000
Cr Prepaid insurance $12,000

d. Depreciation of office equipment for May is $14,000

Dr Depreciation - office equipment $14,000
Cr Accumulated depn $14,000

.e. Accrued salaries on May 31 is $13,600
Dr Sales Salary $7,000

Dr Office Salaries $6,600
Cr Accrued salary $13,600

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