PRACTICE PROBLEM NO.

1
Adjusting Entries 2020
1 Purchases 60,000
Accounts Payable

2 Accounts Receivable 80,000

Sales

3 Cost of Sales 20,000

Merchandise Inventory

Adjusting Entries 2021

1 Retained Earnings 60,000
Purchases

2 Sales 80,000
Retained Earnings

3 Retained Earnings 20,000

Merchandise Inventory

Adjusting Entries 2022

1 No Entry

2 No Entry

3 No Entry

PRACTICE PROBLEM NO. 2

1 Prepaid Insurance 28,000
Retained Earnings

Insurance Expense 7,000

Prepaid Insurance

2 Cost of Sales 25,000

Mechandise Inventory
3 Sales Commission Expense 15,500
Sales Commission Payable

4 No Entry

5 Equipment 100,000
Depreciation Expense 10,000
Accumulated Depreciation
Retained Earnings
60,000

80,000

20,000

60,000

80,000

20,000

Acquired at the beginning of 2020, 1 year expired

28,000

Insurance expense for 2021

7,000

25,000
15,500

20,000
90,000