Exam 3: Adjusting and Closing Entries

Accounting for revenue on an accrual basis means that no entry of revenue is made until the cash is actually received.

Journalize the following entries for March 31. Explanations are not required. a. A machine costing $7,000 with no salvage value was purchased on March 1 and straight-line depreciation is being used. The life is 5 years. b. Unearned revenue was earned at the rate of $300 per month, starting November 1. c. Wages incurred but not paid are $2,300.

The total revenues of $6,500, total expenses of $3,500, and dividends of $500 were recorded in the closing entries. Calculate the net income.

The supplies account must be adjusted to reflect how many supplies were used during the period.

An example of a contra-account would be accumulated depreciation.

It does not matter when a fiscal year starts as long as it is twelve consecutive months long.

Whitney's Music School account balances on January 31, 2013 are below. All accounts have normal balances. The income tax rate is 30%. Required: 1. Prepare the unadjusted trial balance as of December 31, 2013. 2. Journalize and post the adjusting journal entries based on the following information. a. Accrue Salary, $1500. b. Record the expiration insurance, 500. c. Supplies on hand, $100. 3. Prepare an adjusted trial balance as of December 31, 2013. 4. Journalize and post the closing entries. 5. Prepare a post-closing trial balance at December 31, 2013.