Examine the following adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 2014. Include appropriate descriptions.
2013 | (Adjustment a) |
|
|
Dec. 31 | Uncollectible Accounts Expense | 3,625.00 |
|
| Allowance for Doubtful Accounts |
| 3,625.00 |
| To record estimated loss from uncollectible accounts based on 0.5% of net credit sales, $725,000 |
|
|
| (Adjustment b) |
|
|
Dec. 31 | Supplies Expense | 4,700.00 |
|
| Supplies |
| 4,700.00 |
| To record supplies used during the year |
|
|
| (Adjustment c) |
|
|
31 | Insurance Expense | 1,350.00 |
|
| Prepaid Insurance |
| 1,350.00 |
| To record expired insurance on 1-year |
|
|
| $5,400 policy purchased on Oct. 1 |
|
|
| (Adjustment d) |
|
|
31 | Depreciation. Exp.—Store Equipment | 14,300.00 |
|
| Accum. Depreciation—Store Equip. |
| 14,300.00 |
| To record depreciation |
|
|
| (Adjustment e) |
|
|
31 | Salaries Expense—Office | 2,800.00 |
|
| Salaries Payable |
| 2,800.00 |
| To record accrued salaries for Dec. 29–31 |
|
|
| (Adjustment f) |
|
|
31 | Payroll Tax Expense | 214.20 |
|
| Social Security Tax Payable |
| 173.60 |
| Medicare Tax Payable |
| 40.60 |
| To record accrued payroll taxes on accrued salaries: social security, 6.2% ×2,800 = $173.60; Medicare, 1.45% ×2,800 = $40.60 |
|
|
| (Adjustment g) |
|
|
31 | Interest Expense | 200.00 |
|
| Interest Payable |
| 200.00 |
| To record accrued interest on a 4-month, 6% trade note payable dated Nov. 1: $20,000 ×0.06 × = $200 |
|
|
| (Adjustment h) |
|
|
31 | Interest Receivable | 215.00 |
|
| Interest Income |
| 215.00 |
| To record interest earned on 6-month, 10% note receivable dated Oct. 1: $8,600 ×0.10 × = $215 |
|
|
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