Adjusting entries

EX 1 : The following data are collected from the books of Adeba Traders :

1)      Service provided but unbilled tk.2,500

2)      Office supplies of tk.750 have been used

3)      Unearned revenue tk.1,500 has been earned .

4)      Salaries of tk.1,250 are unpaid.

5)      Prepaid insurance of 2,000 has been expired.

6)      Deprecation on equipment estimated to be tk.2,000 .

7)      Interest accrued on notes payable tk.500.

8)      Automobile depreciation is tk.2,000 for the year.

9)      Tk.20,000 of the unearned fees has been earned .

10)  Accrued rent at December 31, are tk.4,000

11)  Repairs to automobile of tk.800 have been incurred but bills are unpaid.

EX 2: Dr.Tasnim opened a Dental practice o July 1, 2009. During the first month of operation the following transactions occurred .

1)      Performed service for two patients who had plan insurance policy. At July 31, tk.8,500 such service was earned but mot yet billed to insurance company.

2)      Utility expanses incurred but not paid prior to July 31, totaled tk.2,500.

3)      Purchase dental equipment on July 1, for tk.2,50,000 , Paying tk.1,00,000 in cash and signing a tk.1,50,000 two years notes. The equipment depreciates tk.2,000 per month. Interest is tk.1,500 per month.

4)      Purchase one year malpractice insurance policy on July 1, For tk.18,000 .

5)      Purchased tk.7,500 of dental supplies .On July 31, determined that tk.1,500 of supplies on hand prepare adjusting entries on July 31,2009.

EX 3: Mr. Ben open the Green Thumb Lawn Care company on April 1, The Trial balance shows the following balance for selected accounts:                                     Taka

   Prepaid Insurance ................7,200   

   Notes payable ......................50,000

   Unearned revenue................84,000

   Service revenue ..................36,000

   Equipment .........................80,000

Analysis reveals the following additional data pertaining to these accounts;

1)      Prepaid insurance is of two years insurance policy effective from April 1.

2)      The notes payable is dated  April 1, it is six month 12% notes .

3)      Depreciation on the equipment is tk.750 per month.

4)      Seven customers paid for the company 's six month service package of tk.12,000 beginning in April. These customers were serviced in April.

5)      Lawn service rendered other customers but not billed at April 30 total tk.6,000.

Instructions : Prepare the adjusting entries for the month of April .Show computations .

EX 4: The following information 2005 is available concerning the “ Joy company '' which adjusts and closes its every December 31:

1)      The company holds a tk.6,000, 6 month notes receivable . The total interest of the notes tk.100 is to be collected on the maturity date, March 31 of the next year.

2)      Salaries accrued but not paid  total tk.1,760 on December 31,2005.

3)      The tk.450 for December utility bill arrived on December 31,2005.

4)      Building with cost a of tk.40,000 to be depreciated . The depreciation rate is 7% per annum .

5)      Accounts of supplies indicates that supplies account should be reduce by tk.700 because of current year consumption .

6)      Bad debt expenses is estimated to be 2.5% annual sales , sales total tk.2,00,000.

7)      An income tax of the tk.5,000 on current income will be payable on the first quarter of 2006.

Instruction : Journalize the necessary adjusting entries at the end of the year 2005.

EX : 5 The adjusting data listed below are determined on December 31, the end of an annual accounting period :

                         I.      The prepaid insurance account shows a debit of tk.5,400 representing the cost of a 3 year fire insurance policy dated July 1.

                      II.      On October 1 rent revenue was credited for tk.10,800 , representing revenue from sub rental for  6 months period beginning on that date.

                   III.      Purchase  of advertising supplies for tk.4,500 during the year was recorded in advertising expenses account. On December 31, advertising supplies on  Hand tk.1,400.

                    IV.      On November 1,tk.4,500 was paid as rent for 6 month period. The rent expenses account was debited.

                       V.      Miscellaneous office expenses was debited for office supplies of tk.2,000 purchased during the year . On December 31, office of tk.800 are hand .

                    VI.      Interest of tk.250 is accrued on notes payable.

                 VII.      Advertising expenses tk.24,000 was to be written off in four year .

              VIII.      Notes receivable tk.10,000, 6% interest on notes receivable is accrued for three months.

Required : Prepare the adjusting entries for above items.

EX 6: Terry Thoma opens a  Green Thumb Care company on April 30, the Trial balance shows the following balances for selected account:

	Taka
Prepaid Insurance Equipment Notes Payable Unearned revenue Service revenue	36,000 2,80,000 2,00,000 42,000 18,000

Analysis reveals the following additional data:

1)       Lawn service provided other customers but not billed at April 30,2009 totaled tk.15,000

2)       Prepaid insurance is the cost of a two year insurance policy, effective April,1 2009.

3)       The notes payable is dated April 1,2009 . It is 6 months 10% note.

4)       Seven customers paid for the company 's 6 months lawn service package of tk.6,000

5)       Depreciation on the equipment tk.8,000 per month.

EX 7: Mr. Joan open a dental practice on January 1,2011. During the first month of operations the following transactions occurred:

1)       Performed service for patients who had dental insurance , At January 31, 900 of such service was earned but not yet billed to the insurance company.

2)       Purchased tk.2,000 for dental supplies . On January 31, determined that tk.1,600 of supplies were on hand.

3)       Purchased a one year malpractice insurance policy on January 1, for tk.18,000.

4)       Purchased dental equipment on January 1, for tk.80,000 in cash and signing a tk.50,000 ,3 year notes payable. The equipment depreciates 4.80% per month. Interest is 15% per month.

5)       Utilities expenses incurred but not paid this month tk.8,000.

6)       The prepaid insurance account shows a debit of tk.3,600 representing the cost of 3 years.

7)       On January 1, rent revenue was credited for tk.12,000 , representing revenue from sub rental for a year period start at this month.

8)       On January 1, tk.9,000 paid for rent (monthly rent is 750)

9)       Miscellaneous office expenses was debited for office supplies was debited for office supplies for tk.3,600 purchased during the month , on January 31, supplies expenses is tk.2,000.

10)   Interest are accrued on notes payable tk.800.

11)   Interest has been earned but not collected total tk.4,000.

12)   Unearned commission has been earned of tk.1,500.

13)   Prepaid insurance has been expired tk.800 it is fire insurance.

14)   Interest on loan accrued and unpaid tk.2,000.

15)   Bad debts are to be estimated at 8.25% of sales ( trial balance sales tk.8,00,000)

16)    Rentals of tk.2,500 were due from tenants (Use account receivable)

17)   Repairs of automobiles of tk.800 have been incurred but bills are unpaid (use A/P)

18)   Accrued salaries at January tk.18,000.

19)   Automobiles depreciations for a year tk.1,600.

20)   On January 1,receive tk.4,500 for 3 years Apprentice premium.

21)   Interest due on mortgage loan tk.1,200.

22)   Closing Inventory 's valued tk.25,000 for this month.

Required :

a) Prepare the adjusting entries to record above transaction.

(b) Reversing entries.

EX 8 : Pass adjusting entries on 31 December 2010 for the following adjustments:

a)       Value of ending inventory : market value tk.28,000 , cost price tk.15,000.

b)       Charges depreciations on Building @12.75% (Value of building 3,00,000)

c)       Charges interest on capital @9% for one year (Capital tk.6,00,000)

d)       Manager is to be entitled commissions @ 17% on the net income after charging his commission . The net income before charging commission is tk.33,000                               {Note : commission is =  X 33,000 }

e)       On 25^th December 2010 goods costing tk.5,000 destroyed by fire. The insurance company admitted the claim for tk.4,000

f)        Increase allowance for doubtful accounts to tk.5,000 . The existing allowance for doubtful accounts balance tk.3,600.

EX 9: Mr. Khan service company 's balance of accounts on May 31,2005 are as follows:

                                                              Taka

Prepaid Insurance                               7,200

Equipment                                           60,000

Notes payable                                      40,000

Unearned Revenue                              16,800

Service revenue                                    67,000

Analysis reveals the following additional data:

a.       Prepaid insurance is of a two years insurance police , effective from May 1, 2005

b.       Depreciation on the equipment is tk.700 per month.

c.        The notes payable is dated May 1, It is 6 months 12% notes .

d.       Seven customer paid for this company 's six month service package of tk.2,400 begging in May .These customers were service in May 2005.

e.        Service rendered other customers but not billed at May 31, totaled tk.3,000

Prepare the adjusting entries for the month of may 2005.

EX 10: After the following of trial balance on December 31,2008 the account of M/S Rima Traders received the following information's :

1)       Sales includes sales of goods without profit tk.5,000.

2)       Ending Inventory of tk.75,000 which does not including goods worth of tk.10,000 damaged by fire . The insurance company accepted the claim at tk.8,000.

3)       Included in inventory goods worth of tk.7,000 which is purchased but no invoice was received

4)       Goods worth of tk.1,000 taken by owner for his personal use.

5)      Goods distributed as sample tk.1,600.

6)      Wages included an amount of tk.4,000 spent for installation of machine .

7)      Write off tk.1,200 as bad debts.

8)      Total advertising expenses of tk.20,000 was to be written off in four years.

9)      Loose tools costing tk.15,000 was valued at 13,000.

Required : Prepare the adjusting entries for above items

EX 11: Mr.Milton organized a servicing business named National Graphics Company on January 1,2010. At  the end of the first 6 months of operations the trial balance contained the following accounts:

National Graphics Company

Trial Balance ;June 30,2010

Debits	Tk.	Credit	Tk.
Cash & bank Balance	1,10,000	N/P	40,000
A/R	28,000	A/P	18,000
Equipment	90,000	Graphic Revenue	1,35,000
Insurance Expense	3,600	Consulting Revenue	1,04,200
Salaries Expense	60,000	Accumulated Depreciation on equipment	12,000
Supplies	7,400		30,000
Advertising Expense	3,800
Rent Expense	3,000
Utility Expense	33,400
Total	3,39,200	Total	3,39,200

 Other Data:

1.      Invoices representing tk.20,000 of service performed during the last month have not been recorded. The balance in supplies representing supplies purchased on January. At June 30, tk.2,400 of supplies were on hand.

2.      Consulting Revenue are credited to revenue when received .At June 30, consulting revenue of tk.5,000 are unearned.

3.      The balance of insurance expenses is the premium for a one year policy, dated April1,2010

4.      On June 30 was Wednesday, and employees are paid on Friday. National Graphics has three employees . Who are paid tk.5,000 each for 5 day work week.

Instruction:

a)      Journalize the adjusting entries at June 30,2010

b)      Prepare adjusted trial balance

c)      Journalize revering transactions

EX: 12 The following information relates to the Rayhan Tailoring Company at the end of 2008. The accounting period  is the calendar year. This is the company's first year of operations .

1)      Employees are paid every Monday for the five day work week ending on the prior Friday Salaries amount to tk.2,400 per week. The accounting period ends on a Tuesday.

2)      On October 1,2008 Rayhan browed tk.16,000 cash by signing a note payable due in one year at 8% interest. Interest is due when the principle is due.

3)      A note for tk.2,000 was received from a customer in a sales transaction on May 1,2008, The note matures in one year and bears 12% interest per annum. Interest is due when the principle is due.

4)      A portion of Rayhan's parking lot is used by executives of a neighboring company. A person pays tk.6 for per days use. The parking fees are due by the fifth business day following the month of  use . The fees for December 31,2008 amount to tk.2,904

Instructions :

Prepare the necessary adjusting entries at December 31,2008

EX:13 Kamal is the owners of micro land computer services at the end of June 2005 his first month of ownership, Kamal is trying to prepare a monthly financial statement . The following information relates to June of 2005.

1)      At June 30, Kamal owed to employees tk.1,800 that will be paid on August 1,2005

2)      On June1,2005 Kamal Browed tk.48,000 from a local Bank on 10 years Mortgage. The annual interest rate is 10%.

3)      Service revenue unrecorded in June totaling tk.700.

4)      Utility Service expenses of tk.400 accrued.

5)      Unexpired insurance premium totaling tk.700 has expired.

6)      Store supplies of tk.600 used.

7)      Unearned revenue of tk.200 has been earned.

Required :

Journalize the adjusting entries on June30,2005

EX: 14 Samuel sons Company's trial balance at june30,2010 is as follows:

Particulars	Dr. Tk.	Cr. tk.
Cash A/R Insurance expenses Supplies Office equipment A/P Unearned Service Revenue Capital Service revenue Salaries expenses Rent expenses Allowance for bad debit	7,750 6,000 2,400 2,000 15,000 4,000 1,000	4,500 4,000 21,750 7,300 600
Total	38,150	38,150

1.      Supplies on hand at June 30 are tk.1,300

2.      A utility bill for tk.200 has not been recorded and paid.

3.      The insurance expenses for the period tk.1,200

4.      Tk.2,500 of unearned service revenue has been earned at the end of month

5.      Salaries of tk.1,500 are accrued at June 30.

6.      The office equipment has a 7 years life with a salvage value tk.1,000

7.      Invoice representing tk.3,000 of services performed  during the month have not been recorded as of June 30.

8.      Bad debt for the period tk.500. Estimate allowance for bad debt @ 5% on account receivable.

   Instructions:

a)      Prepare the adjusting entries for the month of June.

b)      Also prepare of the reversing entries

EX:15 Pass the adjusting entries the books of Rahman Co. at December 31, 2009

a)      Ending inventory was valued at tk.30,000

b)      The depreciation on equipment tk.1,000

c)      Interest on notes payable tk.2,000

d)      Insurance expired tk.700 per month

e)      Wages paid for machine installation tk.5,000 were included in wages.

f)       Merchandise worth tk.2,000 has been distributed to customers as sample free of cost.

g)      Merchandise worth tk.3,000 has been taken by the proprietor for personal use.

h)      Merchandise destroyed by fire tk.4,000

i)        Sales without profit tk.5,000

j)        Unearned commission tk.6,000 has been earned.

Prepare a adjusting entries.

EX: 16 Abdullah company accumulates the following adjustment data at December 31,2011

1. Service provided but unbilled total tk.750
2. Store supplies of tk.300 have been used
3. unearned revenue of tk.500 has been earned
4. Prepaid insurance totaling tk.200 has expired
5. The office equipment has 5 years life with no salvage value. It is being depreciated at tk.250 per month for 60 months (T.B tk.15,000)

Instructions : Journalize the adjusting entries

EX:17 Jose Contreras is the owner of Curveball Computer Services. At the end of July 2010 his first month of ownership Jose is trying to prepare monthly financial statements .He has the following information for the month.

1. At July 31, Contreras owed employees tk.1,100 in salaries that the company will pay in August.
2. On July 1, Contreras borrowed tk.20,000 from a local bank on a 10 year note. The annual interest rate is 12%
3. Service revenue unrecorded in July totaled tk.1,600
4. Advertising expenses tk.10,000 was written off in four year.
5. Ending inventory was valued at tk.25,000 before taking into consideration the goods destroyed by fire of tk.5,000
6. Unearned revenue is due tk.5,000
7. Stationery worth tk,100 was unused
8. Loose tools costing tk.15,000 was valued at tk.12,000

Prepare the adjusting entries need at July 31,2010

EX: 18  P.C Sarkar D.D.S opened  a dental practice  on January 1,2010 . During  the first month of operations the following transaction occurred.

1. Performed services  for patients who had dental plan insurance . At January 31, tk.900 of such services was earned but not yet recorded .
2. Utility expenses incurred but not paid prior to January 31 totaled tk.1,000.
3. Purchased dental equipment on January 1 for tk.80,000 paying cash 20,000 and signing a note payable tk.60,000 , 3 year note payable. The equipment depreciates tk.400 per month.& Interest tk.500 per month.
4. Purchased a one year malpractice insurance policy on January 1 for tk.18,000
5. Purchased tk.2,600 of dental supplies . On January 31. determined that tk.400 of supplies were on hand .

Instructions:

Prepare the adjusting entries on January 31, Account titles are : Accumulated depreciation dental equipment , Depreciation Expense, Service revenue, Account Receivable, Insurance expenses , Interest expenses, Interest payable, Prepaid Insurance, Supplies, Supplies expenses, Utilities expenses, Utilities payable.

EX 19 Jewel company accumulates the following adjustment data at December 31, prepare adjusting entries.

1. Store supply of tk.300 have been used . ( In trial balance shows supplies expenses tk.1,300)
2. Unearned revenue in December totals tk.600
3. Insurance  expired during December of tk.400 was omitted .
4. Service provided but not recorded total tk.1,100

Prepare a adjusting entries.

EX: 20 What adjustment entries would you pass in regard to the following:

1. Liabilities for outstanding .
2. Insurance premium paid in advance earlier recorded as asset.
3. Income received in advanced which was recorded as liability earlier.
4. Preliminary expenses written off/
5. Allowance for doubtful accounting
6. Inventory at the end
7. Depreciation on building
8. Salary paid in advance which was included in salary expenses  .
9. Salary outstanding .
10. Interest received in advance which was included in interest revenue .

EX :21  The following is the adjusted and unadjusted Trail balance of Nasim company as on December 31, 2004.

Nasim Company

Trial Balance

December 31,2004

Account Titles	Unadjusted Trial Balance		Adjusted Trial Balance
	Dr. Tk.	Cr. Tk.	Dr. Tk.	Cr. Tk.
Cash………………… Accounting receivable Prepaid Insurance Supplies Equipment Acc.Dep- Equipment Notes Payable. Account Payable Salaries payable Interest Payable Unearned rent revenue……………... Capital………………. Drawing Rent revenue Salaries expenses Dep.exp.- Equipment Service revenue Supplies expenses  Interest expenses Insurance expenses	20,000 4,000  4,500 4,000 30,000 2,000	20,000 6,000 4,500 34,000	20,000 6,000 2,000 1,000 30,000 2,000 2,000 1,500 3,000 1,000 2,500	1,500 20,000 6,000 2,000 1,000 3,000 34,000 1,500 2,000
Totals	64,500	64,500	71,000	71,000

 Required : a) Show the adjusting entries

                 b) Show the Reversing entries

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Md.Mursalin Sardar

Cell:01925-425876