Exercise number 1
In the inventory on December 31, 2015, the following appeared:
The rental contract is paid for the period from 01/03/2015 to 01/03/2016.
There are accrued revenues of $300 that have not been recorded in the books.
There is an unrecorded electricity bill of $150 due in the 12th month
Required :
Recording previous operations in the daily book.
Posting the financial operations of the accounts in the ledger and the balance of the accounts.
Preparing the trial balance before and after the inventory adjustments
Registration of inventory adjustment entries
Solution method:
There are accrued revenues of $300 that have not been recorded in the books.
There is an unrecorded electricity bill of $150 due in the 12th month
Required :
Recording previous operations in the daily book.
Posting the financial operations of the accounts in the ledger and the balance of the accounts.
Preparing the trial balance before and after the inventory adjustments
Registration of inventory adjustment entries
Solution method:
Second: Posting to the ledger and balance of accounts:
Fund account
him to him
5000 h/capital 2500 h/furniture
15000 h/revenues 7000 h/bank
5000 h/revenues 500 h/salaries and wages
him to him
5000 h/capital 2500 h/furniture
15000 h/revenues 7000 h/bank
5000 h/revenues 500 h/salaries and wages
300 h/internet expenses
14,700 debit balance
25,000
25,000
Bank account
him to him
5000 h/capital 2500 h/m. Rent
7000 h/fund 1000 h/Al-Amal Company
100 h/electricity expenses
500 h/personal withdrawals
250 h / m. Advertising
7650 debit balance
12,000
12,000
Creditors Account - Al-Amal Company
him to him
1000 h/bank, 2500 h/furniture
1500 credit balance
2500
2500
Furniture account
him to him
5000 to be mentioned
2500
Furniture account
him to him
5000 to be mentioned
5,000 debit balance
5000
5000
Revenue account
him to him
5000
5000
Revenue account
him to him
15000 h/box
5000 h/box
20,000 credit balance
20,000
20,000
Capital account
him to him
20,000
Capital account
him to him
10,000 are mentioned
10,000 credit balance
10,000
10,000
Rent expense account
him to him
2500 h/bank
10,000
Rent expense account
him to him
2500 h/bank
2500 debit balance
2500
2500
Calculation of salary and wages expense
him to him
500 h/box
2500
2500
Calculation of salary and wages expense
him to him
500 h/box
500 debit balance
500
500
Internet expense account
him to him
300 h/box
500
500
Internet expense account
him to him
300 h/box
300 debit balance
300
300
Electricity expense account
him to him
100 h/bank
300
300
Electricity expense account
him to him
100 h/bank
100 debit balance
100
100
Personal withdrawal account
him to him
500 h/bank
100
100
Personal withdrawal account
him to him
500 h/bank
500 debit balance
500
500
Advertising expense account
him to him
250 h/bank
500
500
Advertising expense account
him to him
250 h/bank
250 debit balance
250
250
Third: Preparing the trial balance before the inventory adjustments:
250
250
Third: Preparing the trial balance before the inventory adjustments:
Debit balances Credit balances Account name
14,700
box
7650
the bank
5000
Furniture
14,700
box
7650
the bank
5000
Furniture
1500 Creditors/Al-Amal Company
10,000 capital
20,000 revenue
2500
Rent expense
500
Salaries and wages
300
Internet expense
100
Electricity expense
500
Personal withdrawals
250
Advertising expenses
31,500 31,500 Total
Fourth: Recording inventory settlement entries on 12/31/2015:
2500
Rent expense
500
Salaries and wages
300
Internet expense
100
Electricity expense
500
Personal withdrawals
250
Advertising expenses
31,500 31,500 Total
Fourth: Recording inventory settlement entries on 12/31/2015:
1 Settlement of the rental expense account:
The amount of rent paid in advance for the next fiscal year, which is for the months 1 and 2 of 2016, is excluded, which equals = 12/2500 * 2 = approximately $416,650.
The amount of rent paid in advance for the next fiscal year, which is for the months 1 and 2 of 2016, is excluded, which equals = 12/2500 * 2 = approximately $416,650.
Debtor creditor statement
416,650
From h/rental expenses paid in advance
416,650
From h/rental expenses paid in advance
416.650 to h/m.Rent
Proof of prepaid rent expense
2 Reconciliation of the revenue account:
The accrued revenues are recorded in the current financial period that were not recorded in the journal, which is equal to = 300$.
Debtor creditor statement
300
From h / accrued revenues
300
From h / accrued revenues
300 to h/revenue
Proof of accrued revenue
3 Settlement of the electricity expense account:
The electricity bill due in the 12th month of the current fiscal period, which equals $150, is proven.
Debtor creditor statement
150
From h/ electricity expenses
150
From h/ electricity expenses
150 to h/ due electricity expenses
Electricity bill due
Fifth: Post settlement entries to the ledger and balance them:
When the inventory settlement entries are posted to their accounts in the ledger, the balances of the accounts affected by the settlement operations will change, and new accounts will appear as follows:
Rent expense account
him to him
2500 h/bank 416.65 h/rental expense paid in advance
him to him
2500 h/bank 416.65 h/rental expense paid in advance
2083.35 debit balance
2500
2500
Prepaid rent expense account
him to him
416.650 h / m. for rent
416,650 debit balance
416,650
416,650
Revenue account
him to him
416,650
416,650
Revenue account
him to him
15000 h/box
5000 h/box
300 h / accrued revenues
20,300 credit balance
20300
20300
Accrued revenue account
him to him
300 h/revenue
20300
Accrued revenue account
him to him
300 h/revenue
300 debit balance
300
300
Electricity expense account
him to him
100 h/bank
300
300
Electricity expense account
him to him
100 h/bank
150 h/due electricity expenses
250 debit balance
250
250
Electricity expense account due
him to him
250
250
Electricity expense account due
him to him
150 h/electricity expenses
150 credit balance
150
150
Sixth: Preparing the trial balance after the inventory adjustments:
150
Sixth: Preparing the trial balance after the inventory adjustments:
Debit balances Credit balances Account name
14,700
box
7650
the bank
5000
Furniture
14,700
box
7650
the bank
5000
Furniture
1500 Creditors/Al-Amal Company
150 due electricity bills
10,000 capital
20,300 revenue
2,083,350
Rent expense
500
Salaries and wages
300
Internet expense
250
Electricity expense
500
Personal withdrawals
250
Advertising expenses
416,650
Prepaid rent expense
300
Revenues due
31950 31950 Total
2,083,350
Rent expense
500
Salaries and wages
300
Internet expense
250
Electricity expense
500
Personal withdrawals
250
Advertising expenses
416,650
Prepaid rent expense
300
Revenues due
31950 31950 Total
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