IN A NUTSHELL

YOUR TURN

Activity 15.

Now that you have mastered the terms used in the adjusting entries and has applied these terms to a
situation, it is time to use this knowledge in the preparation of adjusting journal entries for a particular
business entity. The unadjusted trial balance of Charisma Beauty Parlor is shown below. Prepare
adjusting journal entries using the additional information as follows:

Additional Information:

a. A review of the insurance policies showed that P4,000 had expired at the end of the
period.

b. An inventory of supplies revealed a balance of P8,350 were still unused.

c. Estimated depreciation on the equipment for the year is P25,000

d. Accrued interest on the loans payable is P8,000.

e. On Dec. 1, the entity signed a contract with an event organizer in Davao city which
is effective immediately, to be the official hair dresser and make-up artist in all
events sponsored by the organizer for P50,000. The organizer paid for five months
service in advance.

f. Salaries are paid on Saturdays. The weekly payroll is P15,000. Assume that Sept. 30
falls on a Thursday and the entity has a six-day pay week.

Take note of the accounting period, it ends on Dec. 31, 2019 (as reflected in the trial balance).

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