Adjusting Entries: Manual Accounting Practice Set Feedback and Instructions

8/31/2017 Adjusting entries
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Manual Accounting Practice Set
iCandy, Australasian Edition 3
Feedback: Adjusting entries
This is a feedback page. Please review this page carefully because later pages in this practice set build on the feedback
provided here. After you have reviewed your feedback page, click Continue at the bottom of this page to move on to the
next page of your practice set.
You are now asked to journalise and post the adjusting entries after completing the worksheet. This is because, in the
manual accounting system, the worksheet is not part of the journals and ledgers. Therefore completing the Adjustments
column in the worksheet does not automatically update the appropriate ledger accounts. Since this practice set is a
manual accounting practice set, you are still required to manually journalise the adjusting entries and post them to the
general ledger as a separate step.
The purpose of adjusting entries is to ensure that the general ledger account balances reflect the income earned and
expenses incurred during the accounting period.
Remember that the details of the end of month adjustments for June are as follows:
Cash Registers owned by the business: original purchase price was $8,000, estimated useful life was 5 years, and
estimated residual value was $1,000 at the end of the useful life. Depreciation is calculated on a monthly basis using
the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by
the number of months in a year.
Store Fixtures owned by the business: original purchase price was $47,000, estimated useful life was 9 years, and
estimated residual value was $3,000 at the end of the useful life. Depreciation is calculated on a monthly basis using
the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by
the number of months in a year.
The water usage for the month of June is estimated to be $117.
The estimated electricity payable as at the end of June is $271.
Sales staff work every single day during the week including weekends and are paid on a weekly basis. Wages were
last paid up to and including 24 June. Wages incurred after that day (from 25 June to 30 June inclusive) are
estimated to have been $300 per day.

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Office Supplies Expense
Office Supplies
Rent Expense
Prepaid Rent
Advertising Expense
Prepaid Advertising
Insurance Expense
Interest expense incurred during the month of June but not yet paid to EastPac Bank for the bank loan is $210.
Office supplies totalling $643 are still on hand at 30 June.
One month of prepaid rent expired during June. Remember that at the beginning of June, the business paid two
month's worth of rent in advance.
3 months of advertising remained pre-paid at the start of June.
5 months of insurance remained pre-paid at the start of June.
When calculating the portion of prepayments that expire during the month of June, you are asked to assume that an equal
amount of expense is incurred per month.
Additionally, a stocktake revealed that the balance of inventory on hand as at 30 June is equal to the closing balance of the
Inventory account. This means there is no adjusting entry required for inventory shrinkage.
Instructions for adjusting entries
Use the worksheet to assist you in recording the adjusting entries in the general journal.
Post the adjusting entries from the general journal to the general ledger accounts.
Record the final adjusted balance of each ledger account in the Adjusted Balance row of each ledger, even for ledgers
with a balance of zero. Although each ledger already has a running balance, the Adjusted Balance row must still be
filled out in order to receive full points.
Back-On-Track functionality
Please note that any answers from previous pages carried through onto this page (either on the page or in a
popup information page) have been reset, if necessary, to the correct answers. Your particular answers from
previous pages are no longer shown.
Remember:
Enter all answers to the nearest whole dollar.
You are also required to apply the journals and ledgers instructions provided in previous weeks.
Before pressing the Submit answers button, we recommend that you click the Show All tab and check that all relevant
accounting records have been completed.
Special Journals General Journal Subsidiary Ledgers General Ledger
(Q=861.generalJournalAdjEntries)
GENERAL JOURNAL
Date Account and Explanation Post
Ref. Debit Credit
Jun 30 544 238 0
130 0 238
Jun 30 540 4800 0
140 0 4800
Jun 30 511 4000 0
141 0 4000
Jun 30 543 830 0
1)
2)
3)
Show All

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Prepaid Insurance
Depn Expense: Cash Registers
Accum Depn: Cash Registers
Depn Expense: Store Fixtures
Accum Depn: Store Fixtures
Wages Expense
Wages Payable
Electricity Expense
Electricity Payable
Water Expense
Water Payable
Interest Expense
Interest Payable
142 0 830
Jun 30 560 117 0
151 0 117
Jun 30 561 407 0
161 0 407
Jun 30 516 1800 0
220 0 1800
Jun 30 541 188 0
221 0 188
Jun 30 542 117 0
222 0 117
Jun 30 571 210 0
225 0 210
Feedback
GENERAL JOURNAL
Date Explanation Post
Ref. Debit Credit
Jun 21 Sales Returns and Allowances 401 1,368
Jun 21 ARC - Mercury Square 110/110-3 1,368
(sales return)
Jun 21 Inventory 120 792
Jun 21 Cost of Sales 500 792
(sales return)
Jun 28 APC - Brennan Imports Group 210/210-5 1,200
Jun 28 Inventory 120 1,200

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(purchase return)
Jun 30 Depn Expense: Cash Registers 560 117
Jun 30 Accum Depn: Cash Registers 151 117
(adjusting entry)
Jun 30 Depn Expense: Store Fixtures 561 407
Jun 30 Accum Depn: Store Fixtures 161 407
(adjusting entry)
Jun 30 Water Expense 542 117
Jun 30 Water Payable 222 117
(adjusting entry)
Jun 30 Electricity Expense 541 188
Jun 30 Electricity Payable 221 188
(adjusting entry)
Jun 30 Wages Expense 516 1,800
Jun 30 Wages Payable 220 1,800
(adjusting entry)
Jun 30 Interest Expense 571 210
Jun 30 Interest Payable 225 210
(adjusting entry)
Jun 30 Office Supplies Expense 544 238
Jun 30 Office Supplies 130 238
(adjusting entry)
Jun 30 Rent Expense 540 4,800
Jun 30 Prepaid Rent 140 4,800
(adjusting entry)
Jun 30 Advertising Expense 511 4,000
Jun 30 Prepaid Advertising 141 4,000
(adjusting entry)
Jun 30 Insurance Expense 543 830
Jun 30 Prepaid Insurance 142 830
(adjusting entry)