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Accounting Adjustments Guide

This document contains adjusting and reversing entries for Arden Trading for the year ending December 31, 2015. It includes entries for adjusting merchandise inventory, supplies expense, prepaid insurance, accrued salaries, interest receivable and payable, depreciation of buildings and equipment, and interest expense.

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John Carlo Lorenzo
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212 views10 pages

Accounting Adjustments Guide

This document contains adjusting and reversing entries for Arden Trading for the year ending December 31, 2015. It includes entries for adjusting merchandise inventory, supplies expense, prepaid insurance, accrued salaries, interest receivable and payable, depreciation of buildings and equipment, and interest expense.

Uploaded by

John Carlo Lorenzo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction
  • Unsold Merchandise
  • Store Supplies Unused
  • Prepaid Insurance
  • Salaries Accrued
  • Notes Receivable
  • Building Depreciation
  • Store Equipment Depreciation
  • Notes Payable
  • Authors

ADJUSTING ENTRIES

AND REVERSING ENTRIES


ARDEN TRADING
DECEMBER 31, 2015
1. Unsold merchandise determined by physical count on
December 31, 2015 amount to 209, 360.
Adjusting Entry:
Merchandise Inventory, end 209,360
Income Summary 209,360
2. Store supplies unused at December 31, 2015 is
1,240.

Initial Journal Entry:


Office Supplies 3,040
Cash 3,040

Adjusting Entry:
Supplies Expense 1,800
Office Supplies 1,800
Office Supplies

3,040
1,800

1,240
3. On April 1, 2015 Arden paid in advance a one-year
coverage on its business assets.

Initial Journal Entry:


Prepaid Insurance 6,080
Cash 6,080

Adjusting Entry:
Insurance Expense 4,560
Prepaid Insurance 4,560
Prepaid Insurance

6,080
4,560

1,520
4. Salaries accrued at December 31, 2015 amounted to
6,000.

Adjusting Entry:
Salaries Expense 6,000
Salaries Payable 6,000
Reversing Entry:
Salaries Payable 6,000
Salaries Expense 6,000
5. The Notes Receivable is a one-year 6% note dated
August 1, 2015.

Initial Journal Entry:


Notes Receivable 15,000
Cash 15,000

Adjusting Entry:
Interest Receivable 375
Interest Income 375

Reversing Entry:
Interest Income 375
Interest Receivable 375
6. Building is depreciated at 5% per annum.
Adjusting Entry:
Depreciation Expense-Building 10,800
Accumulated Depreciation-Building 10,800
7. Store Equipment which has a scrap value of 800 has a
useful life of 10 years.

Adjusting Entry:
Depreciation Expense-Store Equipment 7,200
Accumulated Depreciation-Store Equipment 7,200
8. The notes payable is a 60-day 12% note dated November
16, 2015.

Initial Journal Entry:


Cash 10,000
Notes Payable 10,000
Adjusting Entry:
Interest Expense 150
Interest Payable 150
Reversing Entry:
Interest Payable 150
Interest Expense 150
Members:
Ritcher Keint Pablico
Lucy Allauigan
Krishan Doniego
MJ Talamayan
Jemimah Danguilan

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