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  • Adjusting

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    openid_Z0YayEPS
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    The document outlines adjustments to various accounts including: 1) allocating 5% of accounts receivable to bad debts expense; 2) recognizing 3 months of prepaid rent expense for the period of June 1 to August 31, 2010; and 3) calculating depreciation expense for the period on furniture and fixtures with a 3% annual rate and equipment with a 10 year useful life and $4,000 scrap value. It also includes adjusting supplies expense for the 30% of supplies remaining and calculating interest expense on accounts payable with an interest rate of 25% per month.

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    The document outlines adjustments to various accounts including: 1) allocating 5% of accounts receivable to bad debts expense; 2) recognizing 3 months of prepaid rent expense for the period of June 1 to August 31, 2010; and 3) calculating depreciation expense for the period on furniture and fixtures with a 3% annual rate and equipment with a 10 year useful life and $4,000 scrap value. It also includes adjusting supplies expense for the 30% of supplies remaining and calculating interest expense on accounts payable with an interest rate of 25% per month.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views1 page

    Adjusting

    Uploaded by

    openid_Z0YayEPS
    The document outlines adjustments to various accounts including: 1) allocating 5% of accounts receivable to bad debts expense; 2) recognizing 3 months of prepaid rent expense for the period of June 1 to August 31, 2010; and 3) calculating depreciation expense for the period on furniture and fixtures with a 3% annual rate and equipment with a 10 year useful life and $4,000 scrap value. It also includes adjusting supplies expense for the 30% of supplies remaining and calculating interest expense on accounts payable with an interest rate of 25% per month.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Adjusting Data

    A. 5% of the accounts receivable is allotted for bad debts.


    Bad debts Expense
    Allowance for bad debts
    75,000 x .05 = 3,750

    B. Prepaid rent represents 3 months starting June 1, 2010.


    Rent Expense
    Prepaid Rent
    9,000/3 months =3,000 x .07 = 210

    C. 30% of the supplies still on hand.


    Supplies Expense
    Supplies
    18115 x .30 = 5434.5

    D. The Furnitures and Fixtures has an annual depreciation of 3% starting June 1,2010.
    Depreciation Expense - F&F
    Accumulated Depreciation - F&F
    16,300 x .03 = 489/12 = 40.75 x 8 = 326

    E. The eq. has estimated useful life of 10 years w/ a scrap value of 4,000 purchased June 1,2010
    Depreciation Expense - Equipment
    Accumulated Depreciation - Equipment
    141000 – 4000/10 = 13,700

    F. Accounts Payable has interest rate of 25% per month due December 21,2010
    Interest Expense
    Interest Payable
    1,125 x .25 = 281.25/360 = 0.78 x 10 = 7.8

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