Set B Consider the data in Figure 25 for Deb\' Dance Studior B-1. data L01,2 (40

Question

Set B Consider the data in Figure 25 for Deb' Dance Studior B-1. data L01,2 (40 DEB'S DANCE STUDIO TRIAL BALANCE APRIL 30, 201x FIGURE 25 Trial Balance for Deb's Account Titles Cash Accounts Receivable Prepaid Insurance Dance Supplies Dance Equipment Accumulated Depreciation, Dance Equipment Accounts Payable D. Draper, Capital D. Draper, Withdrawals Dance Fees Earned Salaries Expense Telephone Expense Advertising Expense Dr. Cr 62 000 00 3 00000 700 00 200000 19000 00 Check Figure: Net Income $11,700 46 10000 1870000 160000 10000 40000 Totals 9050000 90 50000 Adjustment Data a. Insurance expired, $500. b. Dance supplies on hand, $400. c Depreciation on dance equipment, $1,200. d. Salaries earned by employees but not due to be paid until May, $600. Your task is to do the following: 1. Prepare a worksheet. 2. Journalize adjusting and closing entries. in each account in your working papers B-2. Enter the beginnhe columns or adiusting and closing entries and Enter the beginning balance in each account in from the Trial Balamalie and post elon trial balance at the end of July gure 26). Fr losing enthendouly. Post-Ciom rom the worksheet, (1) journaldaer a Check Figur Post-Closin

Explanation / Answer

Adjusting entries

a) Insurance expense a/c Dr 500- Transferred to P&L Debit side

To Prepaid Insurance a/c 500

( Being Insurance expired is expensed out and Prepaid insurance bal is reduced to 69500)

Insurance transfer to P& L a/c entry

P&L a/c Dr 500

To Insurance exp a/c 500

b) Dance supplies in hand is 400 so remaining is transferred to P&L a/c

P&L a/c Dr 199600

To Dance supplies 199600

( Being Dance supplies transferred to Income statement and Dance supplies in hand - 400 is carried to Balance sheet)

c) Depreciation on Dance equipment a/c Dr 1200

To Accumulated Depreciation on Dance equipment 1200

( Being Dep recorded)

P&L a/c Dr 1200

To Depreciation on Dance equipment a/c 1200

(Being Depreciation tranaferred to P&L a/c)

d) Since we follow accrual based accouting we record salaries expense though it is not due and paid yet

Salaries expense a/c Dr 600-This is expensed

To Salaries Payable a/c 600- This is reflected in B/S

( Being Salaries payable in May recorded)

P&L a/c Dr 160600

To Salaries Expense a/c 160600

(Being Salaries exp transferred to P&L a/c)

e) Dance fees earned transferred to P&L a/c

Dance fees Earned a/c Dr 1870000

To P & L a/c 1870000

f) P & L a/c Dr 150000

To Advertising exp 40000

To Telephone exp 110000

( Being telephone and adv transferred to P&L a/c)

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