Learning Objective 3 Journalizing adjusting entries and subs

Learning Objective 3 Journalizing adjusting entries and subsequent journal entries Lopez Landscaping has the following data for the December 31 adjusting entries: P3-39B a. Each Friday, Lopez pays employees for the current week\'s work. The amount of the weekly payroll is $6,500 for a five-day workweek. This year, December 31 falls on a Wednesday. Lopez will pay its employees on January 2 covers two years, $7,500. purchased office supplies for $5,800, and at December 31 the office supplies on b. On January 1 of the current year, Lopez purchases an insurance policy that c. The keginning balance of Office Supplies was $3,700. During the year, Lopez hand total $3,000. d. During December, Lopez designed a landscape plan and the client prepaid $6,000. Lopez recorded this amount as Unearned Revenue. The job will take several months to complete, and Lopez estimates that the company has earned 70% of the total revenue during the current year. e. At December 31, Lopez had earned $7,500 for landscape services completed for f. Depreciation for the current year includes Equipment, $3,800; and Trucks, & Lopez has incurred $250 of interest expense on a $350 interest payment due on Tomball Appliances. Tomball has stated that it will pay Lopez on January 10. $1,400. lanuarv 15.

Answer

Transaction no.

Accounts title & Explanation

Debit

Credit

Salaries & Wages expense

$ 4,020.00

Salaries & Wages payable

$ 4,020.00

[$6500 for 5 days. Days payable in jan = 2 days, No. of days for which salaries accrued = 5 - 2 =3 days. Adjustment = 6700 x 3/5

a. SUBSEQUENT Entry next year Jan-02

Salaries & Wages expense

$ 2,680.00

Salaries & Wages payable

$ 4,020.00

Cash

$ 6,700.00

( 5 days salaries paid)

Insurance expense

$ 3,750.00

Prepaid Insurance

$ 3,750.00

$7500 is for 2 year. Insurance expired till 31 Dec for this year = 7500 x (1year/2years)

Office Supplies expense

$ 6,500.00

Office Supplies

$ 6,500.00

Adjustment = supplies consumed = Beginning balance + purchases - ending balance. 3700 + 5800 - 3000 = 6500

Unearned revenue

$ 4,200.00

Revenue Earned

$ 4,200.00

Revenue earned during current year = 70% of $6000 = 6000 x 70% = 4200

d. SUBSEQUENT Entry next year

Unearned revenue

$ 1,800.00

Revenue Earned

$ 1,800.00

Revenue earned during next year = 30% of $6000 = 6000 x 30% = 1800

Accounts Receivables

$ 7,500.00

Revenue Earned

$ 7,500.00

Revenue earned recorded on accounts

Depreciation expense - Equipment

$ 3,800.00

Depreciation expense - Truck

$ 1,400.00

Accumulated Depreciation - Equipment

$ 3,800.00

Accumulated Depreciation - truck

$ 1,400.00

Depreciation expenses for the year recorded.

Interest expense

$ 250.00

interest payable

$ 250.00

Interest expenses accrued recorded

g. SUBSEQUENT Entry next year 15-Jan

Interest expense

$ 100.00

interest payable

$ 250.00

Cash

$ 350.00

Interest paid in cash

Transaction no.	Accounts title & Explanation	Debit	Credit
a.	Salaries & Wages expense	$ 4,020.00
	Salaries & Wages payable		$ 4,020.00
[$6500 for 5 days. Days payable in jan = 2 days, No. of days for which salaries accrued = 5 - 2 =3 days. Adjustment = 6700 x 3/5


a. SUBSEQUENT Entry next year Jan-02	Salaries & Wages expense	$ 2,680.00
	Salaries & Wages payable	$ 4,020.00
	Cash		$ 6,700.00
	( 5 days salaries paid)

b.	Insurance expense	$ 3,750.00
	Prepaid Insurance		$ 3,750.00
$7500 is for 2 year. Insurance expired till 31 Dec for this year = 7500 x (1year/2years)


c.	Office Supplies expense	$ 6,500.00
	Office Supplies		$ 6,500.00
Adjustment = supplies consumed = Beginning balance + purchases - ending balance. 3700 + 5800 - 3000 = 6500


d.	Unearned revenue	$ 4,200.00
	Revenue Earned		$ 4,200.00
Revenue earned during current year = 70% of $6000 = 6000 x 70% = 4200


d. SUBSEQUENT Entry next year	Unearned revenue	$ 1,800.00
	Revenue Earned		$ 1,800.00
Revenue earned during next year = 30% of $6000 = 6000 x 30% = 1800


e.	Accounts Receivables	$ 7,500.00
	Revenue Earned		$ 7,500.00
Revenue earned recorded on accounts


f.	Depreciation expense - Equipment	$ 3,800.00
	Depreciation expense - Truck	$ 1,400.00
	Accumulated Depreciation - Equipment		$ 3,800.00
	Accumulated Depreciation - truck		$ 1,400.00
Depreciation expenses for the year recorded.


g.	Interest expense	$ 250.00
	interest payable		$ 250.00
Interest expenses accrued recorded


g. SUBSEQUENT Entry next year 15-Jan	Interest expense	$ 100.00
	interest payable	$ 250.00
	Cash		$ 350.00
Interest paid in cash

Learning Objective 3 Journalizing adjusting entries and subsequent journal entries Lopez Landscaping has the following data for the December 31 adjusting entri

Learning Objective 3 Journalizing adjusting entries and subs

Solution

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