Question

Credit 9,000 4,800 850 Trial Balance 31-Jul-20 Debit Cash 20,250 Account Receivable, 7/31/19 5,300 Inventory, 7/31/19 20,000 Equipment 35,000 Accumulated Depr, 7/31/19 Account Payable, 7/31/19 Payroll Tax Withheld Javelina, Withdrawals 24,000 Javelina, Capital 7/31/19 Sales Cost of Goods Sold 82,700 Salaries 29,500 Payroll Taxes 2,900 Rent 8,400 Miscellaneous Expense 3,900 Insurance 2,400 Utilities 3,500 Totals 237,850 35,400 187,800 237,850
J J Market accounts for transactions on the cash basis during the year. At year, the CPA has to adjust the books to accrual basis. Prepare the required adjusting entries.

Answer 1

Credit Debit 3700 3700 900 900 1200 1200 Adjusting entries Transactions General Journal 1 Account Receivable Sales (9000-5700) Additional sales 2 Bad debts Expense Allowance for doubtful debts (Providing Allowance for doubtful debts) 3 Inventory Account payable (6000-4800) Additional purchase Inventory Cost of goods sold (Balance inventory Added) 5 Prepaid rent Rent (11 months rent paid in advance) 4200*11/12 6 Prepaid Insurance Insurance (12 months insurance paid in advance) 4 300 300 3850 3850 1200 1200

7 4750 4750 8 510 Depreciation Accumulated depreciation (Providing depreciation) Salaries expense Salary payable (Accrued salary expense) Utilities expense Utilities payable (Accred utilities expense) 510 8 600 600

As cost of goods sold is given, the closing inventory might have been accounted. The balance 20000 given may be inventory 0n 31 July 2020.