Question

The following account balances are provided for Privy Piping, Inc. The results are for the month ending July 31, 2019. $ 21,460 359,000 96,740 2,350 150,000 172,100 325,000 241,850 750 120 300 Accounts payable Accounts receivable Accumulated depreciation Advertising expense Bank loan Cash Common stock Furniture and fixtures Interest payable Interest receivable Interest revenue Investments Loss on sale of equipment Parts and supplies Prepaid rent Rent expense Retained earnings Salaries expense Service revenue Supplies expense Unearned revenue Utilities expense 20,000 3,000 24,000 35,000 9,000 144,370 41,000 213,000 76,000 33,000 1,200

What are the adjusting journal entries for the 11 listed adjustments?

Answer 1

Answer:

Adjusting Journal entries for July, 2019:

Date Credit Debit 7,000 7,000 July.31 4,030 4,030 July 31 7,400 7,400 July 31 17,500 17,500 July.31 7,250 Adjusting General Journal Account Name Rent Prepaid rent (to record July's rent expire) Depreciation Accumulated depreciation (to record July's depreciation on firniture: (241.850/5/12) Account receivable-accrued Revenue (to record unbilled revenue) Cash Unearned Revenue (to record prepaid service) Part & supplies shrinkage expense Parts & supplies (to record parts & supplies shrikage expense) Wages expense Wages payable (to record July's wages expense) Interest expense Interest payable (to record July's interest expense) No entry for cell phone expense as it is related to August Interest receivable Interest on investment (to record July's interest income) Salaries expense FUTA payable (to record FUTA payroll expense) 7,250 July.31 12,100 12,100 July.31 4,500 4,500 July.31 July.31 ol 480 480 July 31 2,460 2,460 July 31

Note:

(i) Prepaid rent expires in November. Including, July, 5 months are there. Hence for each month $7,000 ($35,000 / 5) has been recognised as rent expense.

(ii) Total Income is: 213,000 + 7,400 + 480 = $220,880

     Total expense is: 2,350+3,000+41,000+76,000+1,200+7,000+4,030+7,250+12,100+4,500+2,460 = $160,890

      Income = 220,880 - 160,890 = $59,990

      Tax expense = $59,990 * 21% =$12,598