BOOKKEEPING LEVEL 2MERCHANDISING AND ADJUSTING ENTRIES Cash

BOOKKEEPING LEVEL 2-MERCHANDISING AND ADJUSTING ENTRIES Cash P Accounts Receivable 90, 620 3, 000 Allowance for doubtful Accounts 5,000 Notes Receivable Accrued Interest Receivable P 60, 000 on Notes 1,200 18, 000 2,000 10,000 Merchandise Inventory Unused 0ffice Supplies Accounts Payable Notes Payable 80,000 sss and Philhealth Premi um Payable 80 120 Income Taxes Withheld Payable Accrued Interest Payable on Notes 800 Accrued Salaries Payable 400 Unearned Rent Income 7,000 M. Rivera, Capital 1,554,70 Sales Sales Returns and Allowances 8, 500 1,197, 120 9, 300 Cost of Sales Taxes and Licenses Store Rent Delivery Expense Salaries sss and Philhealth Premiums 120,000 4, 650 90, 7 6, 680 1, 600 4,190 Expense Interest Expense on Notes Communication Expense Utilities Expense Office Supplies Expense Insurance Expense Rent Income Interest Income , 300 24,00 19,000 600 410 Miscellaneous Expenses P1, 665, 700 P1,665, 700 Totals a. Data for adjustments: 1. Bad debts provision - of 18 of Sales. · \'unused office supplies, P250. . Accrued salaries, P206. 4. Unearned rent income, P7,000 5. Accrued utilities, P350. 6. The insurance expense is for one year starting April 1, 2007. 7. Depreciation is 108 annually

Solution

1) Bad debts expense = (1554700-8500)*0.5% = 7731 Allowance for doubtful accounts 7731 2) Office supplies expense (2000-250) 1750 Unused office supplies 1750 3) Salaries expense 206 Accrued salaries payable 206 4) Unearned rent income - No entry required as the balance in the account is 7000. 5) Utilities expense 350 Utilities payable 350 6) Prepaid insurance (24000*3/12) 6000 Insurance expense 6000 7) Depreciation expense--No enty required as there is no asset.