Requirement #4: Prepare adjusting entries using the following information in the

Question

Requirement #4:

Prepare adjusting entries using the following information in the General Journal
below. Show your calculations!

a) One month's insurance has expired.

b) The remaining inventory of landscaping supplies is $388.

c) The estimated depreciation on landscaping equipment is $140.

d) The estimated income taxes are $80.

General Journal
Date Description(Account Name) Debit Credit
8/1/2012 Insurance Expense 200 2400/12
Prepaid Insurance 200
Supply Expense 392 780-388
Landscape Supply 392
Depreciation Expese 140 no calc
Accuulated Depreciation 140
Tax Expense 80 no calc
Tax Payable 80






Requirement #5:

Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.
Just add to the balances that are already listed.

Explanation / Answer

July 1 Began business by making a deposit in a company bank account of $24,000, in exchange for 4,800 shares of $5 par value common stock. Debit: Cash 24,000 Credit: Common Stock 24,000 July 1 Paid the premium on a one-year insurance policy, $2,400. Debit Prepaid Insurance 2,400 Credit Cash 2,400 July 1 Paid the current month's rent, $2,080. Debit Rent Expense 2,080 Credit Cash 2,080 July 3 Purchased landscaping equipment from Brookwood Company, $8,800. Paid $1,200 down and the balance was placed on account. Payments will be $400.00 per month for nineteen months. The first payment is due 8/1. Note: Use Accounts Payable for the Balance Due. Debit Landscaping Equipment 8,800 Credit Cash 1,200 Credit Accounts Payable 7,600 July 8 Purchased landscaping supplies from Lakeside Company on credit, $780. Debit Landscaping Supplies 780 Credit Accounts Payable 780 July 12 Paid utility bill for July, $308. Debit Utility Expense 308 Credit Cash 308 July 16 Cash landscaping revenue for the first half of July, $2,724. Debit Cash 2,724 Credit Landscaping Revenue 2,724 July 19 Made payment on account to Lakeside Company, $400. Debit Accounts Payable 400 Credit Cash 400 July 31 Cash landscaping revenue for the last half of July, $2,620. Debit Cash 2,620 Credit Landscaping Revenue 2,620 July 31 Declared and paid cash dividend of $1,600. Debit Retained Earnings 1,600 Credit Cash 1,600 Requirement 4 - Prepare the Adjusting Entries Adjusting Entries(Help on this one!) Dr Insurance Expense $200 Cr Prepaid Insurance $200 Expensed Insurance for July Dr Acct Payable 400 Cr Cash 400 Supplie Lakeside paid partila paymnt Dr Acct Payable 1200 Cr Cash 1200 Paid $1200 to Brrokwood Retained Earnings Dr 2356 Net Income Cr 2356 CLosed out Income acct Dr Dividend Paid $1600 Cr Cash $1600 DIvidend declared & paid

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