Chapter 5 The Accounting Cycle: Adjustments
182
) Create the journal entries for the adjustments from the worksheet.
date Account Title and explanation Pr debit Credit
AP-12A LO XXXXXXXXXX
Zig Zag Robotics has the following adjustments to make at the end of September 2018, the end of its fiscal year.
Sep 30 Unearned revenue of $850 has now been earned
Sep 30 A count of the office supplies shows that $430 worth of supplies still remains on hand
Sep 30 Salaries accrued but not yet paid amount to $2,430
Sep 30 Monthly depreciation on equipment was $600
The chart of accounts is shown below.
Account description Account # Account description Account #
AsseTs oWner's eQuiTy
Cash 101 Rizzo, Capital 300
Accounts Receivable 105 Rizzo, Withdrawals 310
Office Supplies 110
Equipment 120 reVenue
Accumulated Depreciation—Equipment 130 Service Revenue 400
liABiliTies eXPenses
Accounts Payable 200 Salaries Expense 530
Unearned Revenue 210 Depreciation Expense 535
Salaries Payable 220 Supplies Expense 540
Chapter 5The Accounting Cycle: Adjustments
183
equired
a) Complete the six-column spreadsheet.
Zig Zag robotics
spreadsheet
september 30, 2018
unadjusted Trial
Balance
Adjustments Adjusted Trial
Balance
Account Title dr Cr dr Cr dr C
Cash $3,000
Accounts Receivable 950
Office Supplies 830
Equipment 5,500
Accumulated Depreciation—Equipment $1,800
Accounts Payable 1,250
Unearned Revenue 1,700
Rizzo, Capital 4,030
Rizzo, Withdrawals 500
Service Revenue 4,200
Salaries Expense 2,200
Total $12,980 $12,980
) Journalize the adjustments.
date Account Title and explanation Pr debit Credit
Chapter 5 The Accounting Cycle: Adjustments
184
c) Post the transactions to the general ledger accounts provided.
Account: office supplies gl no: 110
date: description Pr dr Cr Balance
Opening Balance
Account: Accumulated depreciation—equipment gl no: 130
date: description Pr dr Cr Balance
Opening Balance
Account: unearned revenue gl no: 210
date: description Pr dr Cr Balance
Opening Balance
Account: salaries Payable gl no: 220
date: description Pr dr Cr Balance
Opening Balance
Account: service revenue gl no: 400
date: description Pr dr Cr Balance
Opening Balance
Account: salaries expense gl no: 530
date description Pr dr Cr Balance
Opening Balance
Account: depreciation expense gl no: 535
date description Pr dr Cr Balance
Opening Balance
Account: supplies expense gl no: 540
date description Pr dr Cr Balance
Opening Balance
Chapter 5The Accounting Cycle: Adjustments
185
Analysis
What is the purpose of preparing a spreadsheet before journalizing and posting adjusting entries, and before
preparing financial statements?
AP-13A LO 6
On January 1, 2018, Precision Machinery purchased a new piece of equipment for $100,000. The equipment is
expected to last five years and will have no residual value. Precision Machinery has a December 31 year end.
Prepare the table below showing the yearly depreciation, accumulated depreciation and net book value of the
equipment.
year original Cost of equipment
depreciation
expense
Accumulated
depreciation
net Book
Value
2018
2019
2020
2021
2022
Total
AP-14A LO 6
On March 1, 2018, Jefferson Consulting purchased new computers for $19,000. The computers are expected
to last three years and have an estimated residual value of $1,000. Jefferson has a December 31 year end.
Prepare the table below showing the yearly depreciation, accumulated depreciation and net book value of the
computers.
year original Cost of Computers
depreciation
expense
Accumulated
depreciation
net Book
Value
2018
2019
2020
2021
Total