Question

Adjusting entries.

a) Present, in journal form, the adjustments that would be made on July 31, 2013, the end of the fiscal year, for each of the following.
1. The supplies inventory on August 1, 2012 was $7,350. Supplies costing $22,150 were acquired during the year and charged to the supplies inventory. A count on July 31, 2013 indicated supplies on hand of $8,810.
2. On April 30, a ten-month, 6% note for $20,000 was received from a customer.
3. On March 1, $12,000 was collected as rent for one year and a nominal account was credited.

Answer 1

J1

Inventory $7,350 (debit)

Trading Account - 2012 $7,350 (credit)

J2

Inventory $22,150 (debit)

Trade Payable $22,150 (credit)

J3

Write down of Inventory $20,690 (debit)

Inventory $20,690 (credit)

J4

Note Receivable $20,000 (debit)

Bank $20,000 (credit)

J5

Rent Prepaid $12,000 (debit)

Bank $12,000 (credit)

Step-by-step explanation:

J1

Being Inventory on hand at begining of the year

J2

Being Inventory supplies acquired.

J3

Being inventory written down after physical count.

Inventory = $7,350 + $22,150 - $8,810 = $20,690

J4

Being Note received from a customer

J5

Being Rent for 1 year received in advance