ACME Distribution, Inc. December 31, 2016 Adjusting Entries Read through each si

Question

ACME Distribution, Inc. December 31, 2016 Adjusting Entries Read through each situation below and on the following pages. After completing any necessary calculations prepare the required adjusting journal entry. When preparing the adjusting journal entries, use the account titles from the trial balance or the general ledger. Post each of the entries below to the trial balance and calculate the adjusted account balances. ?h ha 1) A one year insurance policy was purchased on Sept. 30 for a premium of 518000, e below show your calculations to receive full credit. Complete the required year-end (December 31, 2016) adjusting entry below Credit Account description Post the above entry to the trial balance in the adjustment columns. 2) The company's employees are paid weekly and it is open for business Monday through Saturday each week. The employees have been paid through Friday December 23. The total payroll for all employees is $850 per day and they are paid for all holidays. In the space below show your calculation of the amount due to receive full credit. Record the adjustment to accrue the salary expense through December 31 (ignore the effect cof any related payroll taxes) Debit Credit Account description Post the above entry to the trial balance in the adjustment columns

Explanation / Answer

Ans 1 Transaction Accounts Title Dr Cr 1 Insurance expenses $4,500 Prepaid Insurance (18000/12*3) $4,500 (being adjusting entry made to record insurance expenses) 2 Salaries expenses $6,800 Salaries payable $6,800 (8 days*850) (being salaries expenses accured) 3 Cost of ending inventory 33750+26000+((17728-6500-7500)*3.75) 73730 Amt adjustment (76730-73730) 3000 Dr Cr Inventory $3,000 Cost of Good sold $3,000 4 Estimated allowance (42400*4.4%) 1866 Adjustment needed (same as no opening balance of allownce account) 1866 Dr Cr Bad debt expenses 1866 Allowance for Doubtful debts 1866 5 Depreciation expenses 2696 (50000-4700)/7*5/12 Dr Cr Depreciation expenses 2696 Accumulated Depreciation-Equipment 2696 6 Interest accured 2094 75000*6.7%*5/12 Dr Cr Interest expenses 2094 Interest payable 2094 (being interest accured)

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