File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
Lesson FA-10-020-03 Financial Accounting Fundamentals The Accounting Cycle and Adjusting Journal Entries Part 3
This workbook contains notes and worksheets to accompany the corresponding video lesson available online at:
Permission is granted for educators and students to make copies and redistribute this document without fee provided the copyright notice and page footer is retained. All other intellectual property rights are reserved by the copyright holder. _____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 1 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
Financial Accounting Fundamentals – – The Accounting Cycle and Adjusting Journal Entries – Part 3 [Clip 22] Comprehensive Problem 1 - January 20x0 - Adjusting Entries Malorie Stylists This part of our lesson includes journalizing some practice adjusting entries for Malorie Stylists at January 31, 20x0, followed by an adjusted trial balance. We will use the results of these exercises as a starting point for the lesson on financial statements. We have 8 adjusting entries at January 31 for you to journalize and post. Some are similar to those we looked at earlier. Others will require some creative thinking on your part. Comprehensive Problem 1 – Malorie Stylists Adjusting Entries 1.
Jan. 2 – Contracted with a famous actress to provide weekly styling and spa treatments for a fixed fee of $800 monthly, billable monthly. On January 31, accrued revenue for January from this contract.
2.
Jan. 31 – Accrued one month’s interest expense on $5,000, 12%, 6-month note.
3.
Jan. 31 – Adjusting entry for one month of $900 six-month deferred insurance expired.
4.
Jan. 31 – Adjusting entry for one-month’s rent of $1,500 three-month prepaid rent.
5.
Jan. 31 – Adjusting entry for one-month’s subscription expense on $480 two-year subscriptions.
6.
Jan. 31 – $100 in supplies were unused at the end of January. Adjusting entry for $100 in supplies unused.
7.
Jan. 31 – Adjusting entry for deferred revenue from a famous actor in the amount of $1000.
8.
Jan. 31 – Malorie determined that the legal fees expense of $1,200 should be allocated over each of the 12 months in the year. Adjusting entry to reflect one-month’s legal fees expense for January.
Instructions: Prepare the adjusting journal entries and adjusted trial balance for January 20x0.
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 2 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
Comprehensive Problem 1 – Malorie Stylists Adjusting Entries Instructions: For each situation, 1. Analyze the situation 2. Determine which accounts are affected 3. Analyze the effect on the accounting equation 4. Write the journal entry in good form 5. Post the journal entry to t-accounts 6. Write the adjusting entry in the adjusted trial balance worksheet After all situations are journalized and posted, complete the adjusted trial balance. In practice, professional accountants usually write their adjusting entries in the adjusted trial balance worksheet first, then journalize the entries, then post them to t-accounts. Since this video is intended to show you how to solve situations involving accruals and deferrals, it is more logical for us to write the adjusting entries in the general journal first.
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 3 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
As an aid for these problems, you will find the following in the workbook that accompanies this lesson: 1. 2. 3. 4. 5. 6.
A list of common accounts in the chart of accounts The expanded accounting equation with debit and credit guidelines General journal T-accounts with titles and balances from lesson FA-10-010 (part 3) A completed trial balance from lesson FA-10-010 (part 3) An adjusted trial balance worksheet
Refer to Appendix 2 for an Enlarged Chart
Refer to Appendix 2 for an Enlarged Chart
Refer to Appendix 2 for an Enlarged Chart
Refer to Appendix 2 for an Enlarged Chart
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 4 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
Refer to Appendix 2 for an Enlarged Chart
Refer to Appendix 2 for an Enlarged Chart
Refer to Appendix 2 for an Enlarged Chart
This lesson is designed so that you can watch a video clip explaining each adjusting entry. You can either work through the lesson by watching each video clip, then solving the situation on your own before I show you the solution… I will give a moment to press pause on the video before I show the solution... Or, you can work through the lesson by analyzing and journalizing all 8 situations, check your answers in the workbook, and then watch the video clip if you need an explanation.
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 5 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 23] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #1 Malorie Stylists Comprehensive Problem 1 - January 20x0 - Adjusting Entry #1 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
1.
Jan. 2 – Contracted with a famous actress to provide weekly styling and spa treatments for a fixed fee of $800 monthly, billable monthly. On January 31, accrued revenue for January from this contract. General Journal
Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. [Clip 24] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #2 Malorie Stylists Comprehensive Problem 1 - January 20x0 - Adjusting Entry #2 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
2.
Jan. 31 – Accrued one month’s interest expense on $5,000, 12%, 6-month note. General Journal
Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. _____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 6 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 25] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #3 Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusting Entry #3 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
3. Jan. 31 – Adjusting entry for one month of $900 six-month deferred insurance expired. General Journal Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. [Clip 26] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #4 Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusting Entry #4 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
4. Jan. 31 – Adjusting entry for one-month’s rent of $1,500 three-month prepaid rent. General Journal Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts.
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 7 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 27] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #5 Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusting Entry #5 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
5. Jan. 31 – Adjusting entry for one-month’s subscription expense on $480 two-year subscriptions. General Journal Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. [Clip 28] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #6 Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusting Entry #6 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
6. Jan. 31 – $100 in supplies were unused at the end of January. Adjusting entry for $100 in supplies unused. General Journal Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. _____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 8 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 29] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #7 Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusting Entry #7 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
7. Jan. 31 – Adjusting entry for deferred revenue from a famous actor in the amount of $1000. General Journal Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. [Clip 30] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #8 Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusting Entry #8 - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
8. Jan. 31 – Malorie determined that the legal fees expense of $1,200 should be allocated over each of the 12 months in the year. Adjusting entry to reflect one-month’s legal fees expense for January. General Journal Date
Description
Debit
Credit
Instructions: Write the journal entry and post to the t-accounts. _____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 9 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 31] Comprehensive Problem 1 - January 20x0 – Adjusted Trial Balance Malorie Stylists Comprehensive Problem 1 - January 20x0 – Adjusted Trial Balance - Malorie Stylists (see Appendix 1 for the Solution; see Appendix 2 for the Charts and Worksheets)
Instructions: Determine the balance of each t-account and prepare the trial balance.
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 10 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
APPENDIX 1 - SOLUTIONS [Clip 23] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #1 - Malorie Stylists SOLUTION:
[Clip 24] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #2 - Malorie Stylists SOLUTION:
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 11 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3 [Clip 25] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #3 - Malorie Stylists SOLUTION:
[Clip 26] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #4 - Malorie Stylists SOLUTION:
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 12 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 27] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #5 - Malorie Stylists SOLUTION:
[Clip 28] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #6 - Malorie Stylists SOLUTION:
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 13 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
[Clip 29] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #7 - Malorie Stylists SOLUTION:
[Clip 30] Comprehensive Problem 1 - January 20x0 - Adjusting Entry #8 - Malorie Stylists SOLUTION:
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 14 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3 [Clip 31] Comprehensive Problem 1 - January 20x0 – Adjusted Trial Balance - Malorie Stylists SOLUTION:
_____________________________________________________________________________________________ Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved Page 15 of 24 videos for this lesson are available at evideolearner.com Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
APPENDIX 2 – CHARTS AND WORKSHEETS
CHARTS 1, 2, 3 REFER TO NICHOLE HEALTH SERVICES ILLUSTRATION PROBLEM (see part 2 for those charts)
CHART 4 COMMON ACCOUNTS IN THE CHART OF ACCOUNTS
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 16 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
CHART 5 The Expanded Accounting Equation with Debit and Credit Guidelines
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 17 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
CHART 6 – GENERAL JOURNAL General Journal Date
Description
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Debit
Credit
Page 18 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
CHARTS 7 REFERS TO NICHOLE HEALTH SERVICES ILLUSTRATION PROBLEM (see part 2 for this chart)
CHART 8 T-Accounts for Comprehensive Problem 1 – Malorie Stylists January 31, 20x0
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 19 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 20 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 21 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
CHART 9 Trial Balance, January 31, 20x0 (Before Adjusting Entries) Malorie Stylists
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 22 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
CHART 10 Adjusted Trial Balance Worksheet, January 31, 20x0 Malorie Stylists
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 23 of 24 Revised: 2011-05-24
File: FA-10-020-03-Workbook.pdf Title: Financial Acctng Fundamentals – Acctng Cycle and Adjusting Journal Entries – Part 3
CHART 11 – BLANK T-ACCOUNTS T-Accounts Worksheet
Copyright 2011 by Rocky Spears Enterprises LLC, All Rights Reserved videos for this lesson are available at evideolearner.com
Page 24 of 24 Revised: 2011-05-24
