Question

Adjusting, Closing and Reversing Entries

1. Prepare the entries without making a reversing entry. For a compound transaction, if an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank or enter "0".

2. Prepare the entries with the use of a reversing entry. If an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank or enter "0".

3. Use T-accounts to assist your analysis for without making a reversing entry.

Prepare entries for (a), (b), and (c) listed below using two methods. First, prepare the entries without making a reversing entry. Second, prepare the entries with the use of a reversing entry. Use T-accounts to assist your analysis.

a) Wages paid during 20-1 are $22,380.

b) Wages earned but not paid (accrued) as of December 31, 20-1, are $210.

c) On January 3, 20-2, payroll of $800 is paid, which includes the $210 of wages earned but not paid in December.

Date Without Reversing Entry With Reversing Entry Adjusting Entry: 12/31/XI Account Title Amount Account Title Amount Closing Entry: 12/31/XI Reversing Entry: 1/1/X2 Payment of Payroll: 1/3/X2

Answer 1

Without Reversing Entry:

	Date	Account Title	Debit	Credit
a)		Wages expense	22380
		Cash		22380
b)	AE: 12/31/X1	Wages expense	210
		Wages payable		210
	CE: 12/31/X1	Income summary	22590
		Wages expense (22380 + 210)		22590
	RE: 1/1/X2	No entry
c)	1/3/X2	Wages payable	210
		Wages expense (800 - 210)	590
		Cash		800

With Reversing Entry:

	Date	Account Title	Debit	Credit
a)		Wages expense	22380
		Cash		22380
b)	AE: 12/31/X1	Wages expense	210
		Wages payable		210
	CE: 12/31/X1	Income summary	22590
		Wages expense (22380 + 210)		22590
	RE: 1/1/X2	Wages payable	210
		Wages expense		210
c)	1/3/X2	Wages expense	800
		Cash		800