Question

The following five situations are independent. Each situation requires either an end-of-period adjusting entry or a closing entry. Supply, showing supporting calculations, the required adjusting entry or closing entry which would logically account for the changes in the related account balances. 1. Unearned rent at Jan/1/2016 was $5,300 and at Dec/31/2016 was $6,000. The records indicate cash receipts from rental sources during 2016 amounted to $45,000, a of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Accumulated Depreciation -Equipment at Jan/1/2016 was $230,000. At Dec/31/2016 the balance of the account was $280,000. During 2016, one piece of equipment was sold. The equipment had an original cost of $40,000 and was 75 % depreciated when sold. You are to prepare the missing adjusting entry 2. Allowance for doubtful accounts on Jan/1/2016 was $50,000. The balance in the allowance account on Dec/31/2016 after making the annual adjusting entry was $65,000 and during 2016 bad debts written off amounted to $30,000. You are to provide the missing adjusting entry 3. Prepaid rent at Jan/1/2016 was $9,000. During 2016 rent payments of $110,000 were made and charged to "rent expense." The 2016 Income Statement shows as a general expense the item "rent expense" in the amount of $120,000. You are to prepare the missing adjusting entry that must have been made. Assume that reversing entries are not made. Retained earnings at January 1, 2016 and December 31, 2016 were $150,000 and $210,000, respectively. During 2016, cash dividends of $50,000 were declared and a stock dividend of $40,000 was also issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry 5.

Answer 1

1	Unearned Rent A/c Dr			44300
	To Rent Income A/c Cr				44300

2	Cash A/c Dr					10000
	Accumulated Depreciation A/c Dr					30000
		To Machine and Equipment A/c Cr					40000

3	Cash A/c Dr					15000
		To Allowance in Doubtful A/c Cr					15000

4	Rent Expenses A/c Dr				120000
		To Prepaid Rent A/c Cr				9000
		To Cash/Bank A/c Cr				110000
		To Outstanding Rent A/c Cr				1000

5	Profit and Loss A/c Dr				110000
		To Retained Earning A/c Cr				110000
	Retained Earning A/c Dr				50000
		To Dividend Payable A/c Cr				50000