Transcript ADJUSTING ENTRY FOR SUPPLIES

Accounting I
Chapter 17 – Recording
Adjusting & Closing
Entries for a Partnership
ADJUSTING ENTRIES RECORDED IN A JOURNAL
2
1
4
3
5
6
1. Heading
2. Date
3. Account Debited
4. Debit
5. Account Credited
6. Credit
Lesson 17-1, page 422
PARTIAL WORK SHEET SHOWING ADJUSTMENTS
Lesson 17-1, page 423
ADJUSTING ENTRY FOR MERCHANDISE INVENTORY
AFTER ADJUSTMENT
BEFORE
ADJUSTMENT
Income Summary
Adj. (a)
15,840.00
Merchandise Inventory
Bal.
270,480.00
(New Bal. 254,640.00)
Adj. (a)
15,840.00
Lesson 17-1, page 423
ADJUSTING ENTRY FOR OFFICE SUPPLIES
INVENTORY
AFTER ADJUSTMENT
BEFORE
ADJUSTMENT
Supplies Expense—Office
Adj. (b)
4,730.00
Supplies Expense—Office
Bal.
(New Bal.
6,480.00
1,750.00)
Adj. (b)
4,730.00
Lesson 17-1, page 424
ADJUSTING ENTRY FOR STORE SUPPLIES
INVENTORY
AFTER ADJUSTMENT
BEFORE
ADJUSTMENT
Supplies Expense—Store
Adj. (c)
3,910.00
Supplies Expense—Store
Bal.
(New Bal.
6,944.00
3,034.00)
Adj. (c)
3,910.00
Lesson 17-1, page 424
ADJUSTING ENTRY FOR PREPAID INSURANCE
AFTER ADJUSTMENT
BEFORE
ADJUSTMENT
Insurance Expense
Adj. (d)
3,170.00
Prepaid Insurance
Bal.
(New Bal.
5,800.00
2,630.00)
Adj. (d)
3,170.00
Lesson 17-1, page 424
Work Together &
On Your Own –
Page 425
THE INCOME SUMMARY ACCOUNT
Income Summary
Debit
Total expenses
Credit
Revenue (greater than expenses)
(Credit balance is the net income.)
Lesson 17-2, page 426
CLOSING ENTRY FOR AN INCOME STATEMENT
ACCOUNT WITH A CREDIT BALANCE
1
2
1. Heading
2. Date
3. Debit to Close
4. Credit
3
4
Lesson 17-2, page 427
CLOSING ENTRY FOR INCOME STATEMENT
ACCOUNTS WITH DEBIT BALANCES
1. Date
2. Account Debited
3. Credit to Close
4. Debit Total
3
3
1
2
4
Lesson 17-2, page 428
SUMMARY OF CLOSING ENTRY FOR INCOME
STATEMENT ACCOUNTS WITH DEBIT BALANCES
Income Summary
Adj. (mdse. inv.)
Closing (costs and expenses)
15,840.00
337,664.15
Purchases
Bal.
189,960.00 Closing
(New Bal. zero)
Advertising Expense
Closing (revenue)
(New Bal.
423,120.00
69,615.85)
Rent Expense
189,960.00
Bal.
21,000.00 Closing
(New Bal. zero)
Salary Expense
21,000.00
Bal.
6,600.00 Closing
(New Bal. zero)
Credit Card Fee Expense
6,600.00
Bal.
89,400.00 Closing
(New Bal. zero)
Supplies Expense—Office
89,400.00
Bal.
3,385.00 Closing
(New Bal. zero)
Insurance Expense
3,385.00
Bal.
4,730.00 Closing
(New Bal. zero)
Supplies Expense—Store
4,730.00
Bal.
3,170.00 Closing
(New Bal. zero)
Miscellaneous Expense
3,170.00
Bal.
3,910.00 Closing
(New Bal. zero)
Utilities Expense
3,910.00
Bal.
2,584.15 Closing
(New Bal. zero)
Payroll Taxes Expense
2,584.15
Bal.
3,820.00
(New Bal. zero)
3,820.00
Bal.
9,105.00
(New Bal. zero)
9,105.00
Closing
Closing
Lesson 17-2, page 429
Work Together &
On Your Own –
Page 430
CLOSING ENTRY TO RECORD NET INCOME OR LOSS
AND CLOSE THE INCOME SUMMARY ACCOUNT
3
5
2
1
4
1. Date
2. Account Debited
3. Debit to Close
4. Accounts Credited
5. Credits to Record Net Income
Lesson 17-3, page 431
CLOSING ENTRIES FOR THE PARTNERS’ DRAWING
ACCOUNTS
5
2
1
4
3
1. Date
2. Account
Debited
3. Debit to
Close
4. Account
Credited
5. Credits to
Record
Net
Income
Lesson 17-3, page 432
COMPLETED CLOSING ENTRIES FOR A PARTNERSHIP
RECORDED IN A JOURNAL
Lesson 17-3, page 433
Work Together &
On Your Own –
Page 434
POST-CLOSING TRIAL BALANCE
1
1. Write the heading.
2. List accounts that
have balances.
3. Write debit balances.
3
2
4
5
6
4. Write credit balances.
5. Write the word Totals.
6. Total Debit column.
7. Total Credit column.
8. Verify equality of
totals.
9. Rule double lines.
7
8
9
Lesson 17-4, page 437
ACCOUNTING CYCLE FOR A MERCHANDISING
BUSINESS ORGANIZES AS A PARTNERSHIP.
1. Source documents checked for accuracy,
and transactions are analyzed.
1
2
9
2. Transactions are recorded in a
journal.
3. Journal entries are posted to
ledgers.
3
8
4
5
7
4. Schedules of accounts
payable and accounts
receivable are prepared from
subsidiary ledgers.
5. Work sheet is prepared.
6. Financial statements are
prepared.
7. Adjusting and closing
entries are journalized.
6
8. Adjusting and closing
entries are posted.
9. A post-closing trial
balance is prepared.
Lesson 17-4, page 438
Work Together &
On Your Own –
Page 439