Practice problems on adjusting entry and adjusted trial balance

1. The ledger of Hammond, Inc on March 31,2023, includes the following selected accounts
before adjustments:

Accounts Name Debit Credit

Prepaid insurance 3,600
Office equipment 25,000
Office supplies 2,800
Accumulated depreciation of office equipment 5,000
Unearned service 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 per month.
4. One half of the unearned service was earned in March.

Required: Prepare the adjusting entries for the month of March.

Solution

Hammond, Inc
Adjusting entry
March 31,2023

Date Accounts title Ref Debit Credit

no
2023 Insurance expense..........Dr 100
March 31 Prepaid insurance…..Cr 100

Supplies expense..........Dr 2,000

March 31 Supplies…..Cr 2,000
(2800-800)
Depreciation expense of office equipment…….Dr 200
March 31 Accumulated depreciation of office equipment.Cr
200
Unearned service revenue..........Dr 4,600
March 31 Service revenue…..Cr 4,600
2. “X” companies Trial Balance on June 30, 2023 are as follows:

Accounts No Accounts Name Debit Credit

1. Cash 7150
2. Accounts Receivable 6000
3. Prepaid Insurance 3000
4. Supplies 2000
5. Office Equipment 15000
6. Accounts payable 4500
7. Unearned Service Revenue 4000
8. “X” Capital 21750
9. Service Revenue 7900
1. Salaries Expense 4000
11. Rent Expense 1000
Total 38150 38150

Other Data: Prepaid insurance e golmal lagate paro

1. Supplies on hand at June, 30 are Tk. 1100.

2. A utility bill for Tk. 150 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. Tk. 2500 of unearned service revenue has been earned at the end of the month.
5. Salaries of Tk. 1500 are accrued at june,30.
6. The office equipment has a 5-year life. It is being depreciated Tk. 250 per month.
7. Invoices representing Tk.2000 of service performed during the month have not been
recorded as of June, 30.

Requirements:

(a) Prepare necessary adjusting entries.

(b) Prepare an adjusted trial balance at june30, 2023.
Requirement: (a)

“X” Company
Adjusting Entry
June 30, 2023

Date Accounts Name Ref No Credit

Debit
2012
June- Supplies expense………………………Dr 900
30 900
Supplies………………….Cr

(2000-1100)

June- Utility expense……………………Dr 150

30 Utility payable…………………………Cr 150

June- Insurance expense…………………………Dr 250

30 Prepaid insurance………………….Cr 250

June- Unearned revenue………………………Dr 2500

30 Service revenue………………Cr 2500

June- Salary expense………………………Dr 1500

30 Salary payable…………………Cr 1500

June- Depreciation expense of office equipment ………Dr 250

30 Accumulated depreciation office equipment…….Cr 250

June- Accounts receivable………………………Dr 2000

30 Service revenue………………………………Cr 2000
Requirement: (b)

“X” Company
Adjusted Trial Balance
June 30, 2023

Accounts Title Debit Credit

Cash 7,150
Accounts receivable 8,000
Prepaid insurance 2,750
Supplies 1100
Office equipment 15,000
Accounts payable 4,500
Unearned service revenue 1,500
X capital 21,750
Service revenue 12,400
Utility payable 150
Salary payable 1,500
Accumulated depreciation office equipment 250
Salary expense 5,500
Rent expense 1,000
Supplies expense 900
Utility expense 150
Insurance expense 250
Depreciation expense of office equipment 250
Total 42,050 42,050