Math -1:

The ledger of Hammond, Inc. on March 31, 2010, includes the following selected accounts
before adjusting entries.
Debit ​ ​ Credit
Prepaid Insurance ​ ​ ​ ​ ​ 3,600
Office Supplies ​ ​ ​ ​ ​ 2,800
Office Equipment ​ ​ ​ ​ ​ 25,000
Accumulated Depreciation—Office Equipment ​ ​ ​ 5,000
Unearned Revenue ​ ​ ​ ​ ​ ​ ​ 9,200
An analysis of the accounts shows the following.
1. Insurance expires at the rate of $100 per month.
2. Supplies on hand total $800.
3. The office equipment depreciates $200 a month.
4. One-half of the unearned revenue was earned in March.
Prepare the adjusting entries for the month of March.

Solution:
Hammond, Inc.
Adjusting Journal
For the month ended on March 31, 2010
Date Explanations Ref. Debit ($) Credi
($)

2010
March-31 Insurance Expense ……………Dr. 100 ---
Prepaid Insurance ………………...Cr. 100
(To record insurance expired)

March-31 Office Supplies Expense……...Dr. 2,000 ---

Office Supplies (2800-800)…………………..Cr. --- 2,000
(To record supplies used)

March-31 Depreciation Expense………………………...Dr. ---

Accumulated Depreciation-Office 200 200
(To record monthly depreciation) ---

March-31 Unearned Revenue……………Dr. 4,600 ---

Service Revenue…………………..Cr. --- 4,600
(To record revenue for services provided)
 Total= 6,900
6,900

Math -2:
Calvin and Hobbes are the new owners of Micro Computer Services. At the end of August 2010,
their first month of ownership, Calvin and Hobbes are trying to prepare monthly financial
statements. They have the following information for the month.

1. On August 31, Calvin and Hobbes owed employees $800 in salaries that the company will
pay on September 1.
2. On August 1, Calvin and Hobbes borrowed $30,000 from a local bank on a 15-year note. The
annual interest rate is 10%.
3. Service revenue unrecorded in August totaled $1,100.

Prepare the adjusting entries needed on August 31, 2010.

Solution:
Micro Computer Services
Adjusting Journal
For the month ended on August 31, 2010
Date Explanations Ref. Debit ($) Credit ($)

2010
August-31 Salaries Expense…………….Dr. 800 ---
Salaries Payable………………....Cr. --- 800
(To record accrued salaries)

August-31 Interest Expense……………...Dr. 300 ---

Interest Payable……………….….Cr. --- 300
(To record interest)
 ($30,000 10% 1/12 $250)

Accounts Receivable………….Dr. 1,100 ---

August-31 Service Revenue…………………..Cr. --- 1,100
(To record revenue for services provided)
Total= 2,150 2,150
E3-13 _ Solution
Before ​ After
Adjustment Adjustment Changes
Dr. Cr. Dr. Cr. Dr. Cr.
Cash $10,400 $10,400
Accounts Receivable 8,800 9,800 1,000
Office Supplies 2,300 700 1,600
Prepaid Insurance 4,000 2,500 1,500
Office Equipment 14,000 14,000
Accumulated Dep.—Office Equipment $ 3,600 $ 4,500 900
Accounts Payable 5,800 5,800
Salaries Payable –0– 1,100 1,100
Unearned Rent Revenue 1,500 600 900
T. Garcia, Capital 15,600 15,600
Service Revenue 34,000 35,000 1,000
Rent Revenue 11,000 11,900 900
Salaries Expense 17,000 18,100 1,100
Office Supplies Expense –0– 1,600 1,600
Rent Expense 15,000 15,000
Insurance Expense –0– 1,500 1,500
Depreciation Expense –0– 900 900
$71,500 $71,500 $74,500 $74,500

1)​ Accounts Receivable Dr. 1,000

​ Service Revenue Cr. 1,000

2)​ Office Supplies Expense Dr. 1,600

Office Supplies Cr. 1,600

3)​ Insurance Expense Dr. 1,500

Prepaid Insurance Cr. 1,500

4)​ Depreciation Expense Dr. 900

Accumulated Dep.—Office Equipment Cr. 900

5)​ Salaries Expense Dr. 1,100

Salaries Payable Cr. 1,100

6)​ Unearned Rent Revenue Dr. 900

Rent Revenue Cr. 900
------------------------------------------------------------------------------------------------------------------------------

P3-1A: Solution

A)
Masasi Company
Adjusting Journal
For the Month of June 30, 2010
Date Accounts Title & Explanations Ref. Debit (Tk) Credit (Tk)
2010 Supplies Expense……..Dr. 1,400 -
June-30 Supplies…….…………………..Cr. - 1,400
(To adjust)
June-30 Utilities Expense……..Dr. 150 -
Accounts Payable……………..Cr. - 150
(To adjust)
June-30 Insurance Expense……Dr. 250 -
Prepaid Insurance…………Cr. - 250
(To adjust)
June-30 Unearned Service Revenue…...Dr. 2,500 -
Service Revenue…………………....….Cr. - 2,500
(To adjust)
June-30 Salaries Expense..……..Dr. 2,000 -
Salaries Payable………………….Cr. - 2,000
(To adjust)
June-30 Depreciation expense……Dr. 250 -
Accumulated Depreciation - Office - 250
Equipment…..Cr.
June-30 (To adjust) 1,000 -
Accounts Receivable………Dr. - 1,000
Service Revenue………………..Cr.
(To adjust)
Total=

B)

Masasi Company
 Ledger
For the Month of June 30, 2010

Cash Account
Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June-30 Balance…………………… - - 7,150 -
…...

Accounts Receivable Account

Date Explanations Ref. Debit Credit Balance ($)
($) ($) Debit Credit
June-30 Balance…………………… - - 6,000 -
June-30 …… 1,000 - 7,000 -
Adjusting…………………
…...

Supplies Account
Date Explanations Ref. Debit Credit Balance ($)
($) ($) Debit Credit
June-30 Balance…………………… - - 2,000 -
June-30 …… - 1,400 600 -
Adjusting…………………
…...

Prepaid Insurance Account

Date Explanations Ref. Debit Credit Balance ($)
($) ($) Debit Credit
June-30 Balance…………………… - - 3,000 -
June-30 …… - 250 2,750 -
Adjusting…………………
…...

Office Equipment Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance…………….. - - 15,000

Accounts Payable Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance……………. - - - 4,500
June 30 Adjusting…………. - 150 - 4,650
 Unearned Service Revenue Account
Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance…………… - - - 4,000
June 30 Adjusting…………. 2,500 1,500

T. Masasi, Capital Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance…………… - - - 21,750

Service Revenue Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance…………… - - - 7,900
June 30 Adjusting…………. - 2,500 - 10,400
June 30 Adjusting…………. - 1,000 - 11,400

Salaries Expense Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance…………… - - 4,000 -
June 30 Adjusting………… 2,000 - 6,000 -

Rent Expense Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Balance…………… - - 1,000 -

Supplies Expense Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Adjusting………… 1,400 - 1,400 -

Utilities Expense Account

Date Explanations Ref. Debit Credit Balance ($)
($) ($) Debit Credit
June 30 Adjusting………… 150 - 150 -
 Insurance Expense Account
Date Explanations Ref. Debit Credit Balance ($)
($) ($) Debit Credit
June 30 Adjusting………… 250 - 250 -

Salaries Payable Account

Date Explanations Ref. Debit Credit Balance ($)
($) ($) Debit Credit
June 30 Adjusting………… - 2,000 - 2,000

Depreciation Expense Account

Date Explanations Ref. Debit Credit Balance ($)
(Tk) ($) Debit Credit
June 30 Adjusting………… 250 - 250 -

Accumulated Depreciation - Office Equipment Account

Date Explanations Ref. Debit Credit Balance (Tk)
(Tk) (Tk) Debit Credit
June 30 Adjusting………… - 250 - 250

Masasi Company
Adjusted Trial Balance
For the month of June 30, 2010
S.N. Explanations Ref. Debit Credit
(Tk) (Tk)
1. Cash……………………… 7,150 -
2. ………... 7,000 -
3. Accounts Receivable……….. 600 -
4. Supplies…………………… 2,750 -
5. …….. 15,000
6. Prepaid
7. Insurance……………
8. Office 0 0
9. Equipment……………..
10.
11.
12.
13.
 14.

Total =

Problems to Solve:

E3-6, E3-7, E3-8, E3-9, E3-10, E3-13, P3-1A, P3-2A, P3-3A, P3-5A,
P3-6A.