century 21 accounting © thomson/south-western lesson 14-2 beginning an 8-column work sheet for a...
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CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 14-2LESSON 14-2
Beginning an 8-Column Work Sheet for a Merchandising Business
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-2
RECORDING A TRIAL BALANCE ON A RECORDING A TRIAL BALANCE ON A WORK SHEETWORK SHEET page 410
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221. Account title
2. Account balance
3. Total, prove, and rule the debit and credit columns
CENTURY 21 ACCOUNTING © Thomson/South-Western
ANALYZING AND RECORDING SUPPLIES ANALYZING AND RECORDING SUPPLIES ADJUSTMENTSADJUSTMENTS
1. How many supplies are on hand at the end of the month? $750
2. What is the current balance in the supplies account?
$3480.00
3. What must be done to make it have this balance?
$3480 - $750 = adjustment of $2730
4. What adjustment is made?
Credit Supplies for $2730 and Debit Supplies Expense for $2730
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-2
ANALYZING AND RECORDING SUPPLIES ANALYZING AND RECORDING SUPPLIES ADJUSTMENTSADJUSTMENTS page 411
Adj. (a) 2,730.00
Supplies Expense—Office
Dec. 31 Bal. 3,480.00 Adj. (a) 2,730.00
(Adj Bal. 750.00)
Supplies—Office
Adj. (b) 2,910.00
Supplies Expense—Store
Dec. 31 Bal. 3,944.00 Adj. (b) 2,910.00
(Adj Bal. 1,034.00)
Supplies—Store
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-2
RECORDING SUPPLIES ADJUSTMENTS RECORDING SUPPLIES ADJUSTMENTS ON A WORK SHEETON A WORK SHEET page 412
1. Write the debit amounts in the Adjustments Debit column.
2. Write the credit amounts in the Adjustments Credit column.
3. Label the two parts of the Supplies—Office adjustment with small letter a and small letter b in parentheses.
CENTURY 21 ACCOUNTING © Thomson/South-Western
ANALYZING AND RECORDING PREPAID ANALYZING AND RECORDING PREPAID INSURANCE ADJUSTMENTSINSURANCE ADJUSTMENTS
1. What is the value of insurance at the end of the month? $2630
2. What is the current balance in the supplies account?
$5800
3. What must be done to make it have this balance?
$5800 - $2630 = adjustment of $3170
4. What adjustment is made?
Credit Prepaid Insurance for $3170 and Debit Insurance Expense for $3170
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-2
ANALYZING AND RECORDING A PREPAID ANALYZING AND RECORDING A PREPAID INSURANCE ADJUSTMENTINSURANCE ADJUSTMENT page 413
1. Enter the amount of insurance used in the Adjustments Credit column.
2. Enter the same amount in the Adjustments Debit column.
3. Label the two parts of the adjustment with a small letter c in parentheses. STOP HERE…Merchandise Inventory
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 14-3LESSON 14-3
Planning and Recording a Merchandise Inventory Adjustment
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-3
MERCHANDISE INVENTORYMERCHANDISE INVENTORY page 415
CENTURY 21 ACCOUNTING © Thomson/South-Western
ANALYZING AND RECORDING ANALYZING AND RECORDING MERCHANDISE INVENTORYMERCHANDISE INVENTORY
1. What is the value of inventory at the end of the month? $124,640
2. What is the current balance in the inventory account?
$140,4803. What must be done to make it have this balance?
$140,480 - $124,640 = adjustment of $15,8404. What adjustment is made?
Credit Merchandise Inventory for $15,840 and Debit Income Summary for $15,840
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-3
ANALYZING AND RECORDING A MERCHANDISE ANALYZING AND RECORDING A MERCHANDISE INVENTORY ADJUSTMENTINVENTORY ADJUSTMENT page 416
1. Write the debit amount.
3. Label the two parts of this adjustment with a small letter d in parentheses.
2. Write the credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
ANALYZING AND RECORDING ANALYZING AND RECORDING MERCHANDISE INVENTORYMERCHANDISE INVENTORY
1. What is the value of inventory at the end of the month? $208,000
2. What is the current balance in the inventory account?
$294,7003. What must be done to make it have this balance?
$208,000 - $294,700 = adjustment of $4,2004. What adjustment is made?
Debit Merchandise Inventory for $4,200 and Credit Income Summary for $4,200
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-3
ANALYZING AN ADJUSTMENT WHEN ENDING ANALYZING AN ADJUSTMENT WHEN ENDING MERCHANDISE INVENTORY IS GREATER THAN MERCHANDISE INVENTORY IS GREATER THAN BEGINNING MERCHANDISE INVENTORYBEGINNING MERCHANDISE INVENTORY page 417
Jan. 1 Bal. 294,700.00
Adj. (d) 4,200.00
(New Bal. 298,900.00)
Merchandise Inventory
Adj. (d) 4,200.00
Income Summary
STOP HERE…Uncollected Accounts
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 14-4LESSON 14-4
Planning and Recording an Allowance for Uncollectible Accounts Adjustment
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-4
EstimatedUncollectible
Accounts Expense
=Percentage×Total Saleson Account
$1,245.00=1%×$124,500.00
ESTIMATING UNCOLLECTIBLE ACCOUNTS ESTIMATING UNCOLLECTIBLE ACCOUNTS EXPENSEEXPENSE page 420
Estimate the value of uncollectible accounts.
1. The answer becomes the amount DEBIT to Uncollectible Accounts Expense.
2. The CREDIT is recorded in Allowance for Uncollectible Accounts
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 14-4
1. Enter the estimated uncollectible amount.
ANALYZING AND RECORDING AN ADJUSTMENT ANALYZING AND RECORDING AN ADJUSTMENT FOR UNCOLLECTIBLE ACCOUNTS EXPENSEFOR UNCOLLECTIBLE ACCOUNTS EXPENSE
3. Label the two parts with a small letter e in parentheses.
page 421
2. Enter the same amount in the Adjustments Debit column.