Professional Documents
Culture Documents
3A Accounting
Complex Adjusting Entries
Practice Test
The total sales for the month of April was $26,000.00, but his total accounts
receivable account currently has a balance of $3000.00. Mike uses the Balance
Sheet approach to estimating bad debts expense, therefore he estimates his Bad
Debts at 20% of his total accounts receivable. Make the necessary adjusting
entry to record the prediction of this bad debts expense.
May 16:
Mike tries to phone Carlo Varone to see about his late payment, but the phone
number turns out to belong to the Betty Ford Clinic. Mike writes off the entire
account, totaling $400.00
May 21:
Mike tries to phone Mickey Blue to see about his late payment, but the phone
number turns out to be disconnected. Mike writes off the entire
account, totaling $500.00
May 29:
Much to his surprise, Mike receives a $300.00 payment on the Carlo Varone
account - it turns out that Carlo has recovered from his illness and now has a job.
Carlo apologizes for the late payment and promises to pay the balance as soon
as he can.
May 31:
The total sales for the month of May was $26,000.00, but his total accounts
receivable account currently has a balance of $3000.00. Mike uses the Balance
Sheet approach to estimating bad debts expense, therefore he estimates his Bad
Debts at 20% of his total accounts receivable. Make the necessary adjusting
entry to record the prediction of this bad debts expense.
Page 1
Date
April 30
P.R.
Debit
Credit
600.00
600.00
May 16
400.00
A/R - Varone
400.00
May 21
500.00
A/R - Blue
500.00
May 29
A/R - Varone
400.00
400.00
May 29
Cash
300.00
A/R - Varone
300.00
May 31
500.00
500.00
Page 2
2. Accrued Expenses
The last week of May in 2000 has only three days actually falling within May. The other two days
of this week fall within the month of June. Julie pays her personal assistant, Tom, a salary of
$50.00 a day. However, Tom is only paid on Fridays.
Within the General Journal provided, prepare the two separate entries required in order for
Julie to apportion her Wages Expense correctly to each month. (Observe the diagram
below for assistance.)
MAY
Mon. 29
50.00
Date
May 31
Tue. 30
50.00
JUNE
Wed. 31
50.00
Thur. 1
50.00
P.R.
Fri. 2
50.00
Debit
Credit
150.00
Wages Payable
150.00
June 2
Wages Expense
100.00
Wages Payable
150.00
Cash
250.00
Page 3
3. Unearned Revenue
Lowell Heppner receives a total of $2,000.00 in advance for agreeing to perform two concerts at
$1,000.00 each. (Owing to the fact that his talent is in high demand, payment for his work is
always made in advance.)
Prepare the following entries within the General Journal provided:
May 3 - Record the initial receipt of the money ($2,000.00).
May 23 - Lowell completes his first performance.
June 11 - Lowell completes his second performance.
Date
May 3
P.R.
Debit
Credit
2,000.00
Unearned Revenue
2,000.00
May 23
Unearned Revenue
1,000.00
Fees Earned
1,000.00
June 11
Unearned Revenue
Fees Earned
1,000.00
1,000.00
Page 4
Date
March 4
P.R.
Debit
Credit
166.67
166.67
March 4
Cash
1,200.00
2,000.00
Computer
Gain on Disposal of Asset
3,000.00
200.00
Page 5