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Accounting

The document provides a trial balance for Favell's Ditch Digging Service Company as of June 30 and additional financial information. It instructs the reader to journalize 6 adjusting entries based on the information provided. The adjusting entries account for prepaid insurance expiration, supplies usage, interest revenue and receivable on a note, depreciation of equipment, unearned revenue recognized, and accrued salaries and interest expenses.

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Louie Crane
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96 views2 pages

Accounting

The document provides a trial balance for Favell's Ditch Digging Service Company as of June 30 and additional financial information. It instructs the reader to journalize 6 adjusting entries based on the information provided. The adjusting entries account for prepaid insurance expiration, supplies usage, interest revenue and receivable on a note, depreciation of equipment, unearned revenue recognized, and accrued salaries and interest expenses.

Uploaded by

Louie Crane
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd

Accounting Principles I Chapter 3

ACTIVITY Name:__ Complete the following activity and save this file on your hard drive. Then submit your file to your instructor on Canvas.
Journalize each of the following adjusting entries in the general journal below. Note that no adjusting entries have been made in the current year (compute your adjustments for the first six months of the year). The Trial Balance for Favell's Ditch Digging Service Company at June 30 is as follows: FAVELL'S DITCH DIGGING SERVICE COMPANY TRIAL BALANCE JUNE 30
Debit Cash Prepaid Insurance Supplies Notes Receivable Equipment Unearned Fees Notes Payable J. Favell, Capital Ditch Digging Fees Revenue Salaries Expense Gas and Oil Expense Totals $ 5,500 3,600 900 1,500 25,000 $ 2,000 3,000 19,900 21,700 9,200 900 $46,600 ====== Credit

$46,600 ======

Other data: 1. Favell's insurance policy was purchased on March 1 of the current year and will provide coverage for 2 years. 2. Supplies were counted on June 30. There were $400 worth of supplies on hand.

3. Notes Receivable represents a 9-month, 12% note issued on April 1 of the current year to a customer for services rendered. 4. Equipment was purchased on January 1 of the current year. It is expected that the equipment will have a $1,000 salvage value at the end of its 6 year useful life. The company uses straight line depreciation. 5. Unearned Fees represents a customer deposit received in May. In June, onefourth of the unearned fees were earned. 6. The company has two employees who earn a total of $300 per day. Payroll is paid every Friday for the work performed each week. June 30 this year fell on a Thursday. 7. Notes Payable represents a note owed to the bank. This note was established on May 1 of the current year and carries a term of 6-months, and an interest rate of 12%.
Date June 30 June 30 June 30 General Journal Account title Insurance expense Prepaid insurance Supplies expense Supplies Interest receivable Interest revenue Depreciation expense Accumulated depreciation-equipment Unearned revenue Fees earned Salaries & Wages expense Salaries & Wages payable Interest expense Interest payable Debit 450 500 500 45 45 2000 2000 500 500 1,200 1,200 60 60 Credit 450

June 30 June 30 June 30 June 30

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