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October 24 2022 Discussion

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1.

Cash 10,000
RDV, Capital 10,000

RDV, Drawings 20,000 (example of withdrawal of cash)

Cash 20,000

2. Computer Equipment 20,000


Accounts Payable 20,000
3. Office Supplies 5,000
Cash 5,000
4. Cash 5,000
Office Supplies 5,000
5. Furnitures and Fixtures 10,000
Cash 10,000
6. Accounts Payable 20,000
Cash 20,000
7. Cash 50,000
Notes Payable 50,000
8. Office Supplies 5,000
Accounts Payable 5,000
9. Prepaid Insurance 10,000
Cash 10,000
10. Accounts Payable 5,000
Cash 5,000

Assets = Liabilities + Equity


Debit Credit

Adjusting Entries:

Asset Method:

Prepaid Insurance 24,000 Insurance Expense 8,000

Cash 24,000 Prepaid Insurance 8,000

Expense Method:

Insurance Expense 24,000 Prepaid Insurance 16,000

Cash 24,000 Insurance expense 16,000


Prepaid Insurance= 16,000 (unexpired portion)

Insurance Expense= 8,000

Interest= Principal x rate x time

I= 100,000 x 7% x 3/12

I= 1,750

Interest Expense 1,750

Interest Payable 1,750

Depreciation= (Cost less residual value)/ Useful life

Depreciation= 160,000-10,000= 150,000/3yrs= 50,000/yr

Delivery Vehicle 160,000 Depreciation Expense 50,000

Cash 160,000 Accumulated Depreciation 50,000

Cash 18,000 Unearned Revenue 13,500

Unearned Revenue(liability) 18,000 Service Revenue 13,500

Supplies 6,400 Supplies Expense 5,650

Accounts payable 6,400 Supplies 5,650

Interest= principal x rate x time

I= 90,000 x 4% x 8/12

I= 2,400

Interest Receivable 2,400

Interest Income 2,400


Asset method:

Prepaid Rent 78,000 Rent Expense 26,000

Cash 78,000 Prepaid Rent 26,000

Expense method:

Rent expense 78,000 Prepaid Rent 52,000

Cash 78,000 Rent Expense 52,000

Prepaid Rent= 52,000

Rent Expense= 26,000

Cash

Debit Credit
100,000 5,000
5,000 10,000
50,000 20,000
10,000
5,000
155,000 50,000
105,000

Office Supplies

Debit Credit
5,000 5,000
5,000

10,000 5,000
5,000

Notes Payable

Debit Credit
50,000
RDV, Capital

Debit Credit
100,000

Trial Balance

Account Title Debit Credit


CASH 105,000
Office Supplies 5,000
Notes Payable 50,000
RDV, Capital 100,000

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