138 Chapter 3 The Accounting Information System 5 E3-9 (Adjusting Entries) Selec

Question

138 Chapter 3 The Accounting Information System 5 E3-9 (Adjusting Entries) Selected accounts of Urdu Company are shown below Supplies Beg. Bal. 800 10/31 470 10/17 10/31 2.400 1.650 Salaries and Wages Expense Salaries and Wages Payable 10/15 10/31 10/31 800 600 600 Unearned Service Revenue 400 10/20 Service Revenue Supplies Expense 10/31 650 10/31 470 10/31 10/31 2,400 1,650 400 Instructions From an analysis of the T-accounts, reconstruct (a) the October transaction entries, and (b) the adjusting journal entries that were made on October 31, 2014. Prepare explanations for each journal entry E3-10 (Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units. Its 5

Explanation / Answer

Answer a October Transaction entries Date Account Titles Debit Credit 15/10 Salaries and Wages Expense $800 Cash $800 (recording of salary and wages paid) 17/10 Accounts Receivables $2,400 Service Revenue $2,400 (recording of on account service revenue) 20/10 Cash $650 Unearned Service Revenue $650 (recording of service revenue received in advance) 31/10 Accounts Receivables $1,650 Service Revenue $1,650 (recording of on account service revenue) Answer b October 31st adjusting entries Date Account Titles Debit Credit 31/10 Salaries and Wages Expense $600 Salaries and Wages Payable $600 (recording of salaries and wages payable for the month) 31/10 Supplies Expense $470 Supplies $470 (recording of supplies consumed during the month) 31/10 Unearned Service Revenue $400 Service Revenue $400 (recording of service revenue booked against advance received)

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