Scribd Logo
Upload

Welcome to Scribd!

  • 31 views

    ADJUSTING ENTRIES PPT Examples and Activity

    Uploaded by

    tamorromeo908
    The document discusses adjusting entries for prepaid expenses, unearned revenue, and depreciation. It provides examples of adjusting journal entries for prepaid rent, insurance, and services. It also covers the calculation of depreciation expense and includes an example of computing depreciation for a building.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    ADJUSTING ENTRIES PPT Examples and Activity

    Uploaded by

    tamorromeo908
    31 views14 pages
    The document discusses adjusting entries for prepaid expenses, unearned revenue, and depreciation. It provides examples of adjusting journal entries for prepaid rent, insurance, and services. It also covers the calculation of depreciation expense and includes an example of computing depreciation for a building.

    Original Description:

    Adjusting entries

    Original Title

    ADJUSTING-ENTRIES-PPT-Examples-and-activity

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses adjusting entries for prepaid expenses, unearned revenue, and depreciation. It provides examples of adjusting journal entries for prepaid rent, insurance, and services. It also covers the calculation of depreciation expense and includes an example of computing depreciation for a building.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    31 views14 pages

    ADJUSTING ENTRIES PPT Examples and Activity

    Uploaded by

    tamorromeo908
    The document discusses adjusting entries for prepaid expenses, unearned revenue, and depreciation. It provides examples of adjusting journal entries for prepaid rent, insurance, and services. It also covers the calculation of depreciation expense and includes an example of computing depreciation for a building.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 14

    ADJUSTING

    ENTRIES
    FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 1
    8 STEPS IN ACCOUNTING CYCLE
    1. Identify and analyze transaction
    2. Record transactions in a journal
    3. Post transactions to a general ledger
    4. Determine the unadjusted trial balance
    5. Analyze the worksheet
    6. Adjust journal entries and fix any errors
    7. Create financial statements.
    8. Close the book
    Prepaid expenses. Expense already paid
    but not yet incurred
    • Advance payment of expenses.
    • Prepaid expenses are assets.
    • A portion or all may have expired (becomes an
    expenses) at the end of an accounting period.
    • Expired either with the passage of time or through
    use and consumption
    • Supplies, Rent and Insurance
    Problem Example:
    On October 1, 2023, X Company paid one year advance rent
    for ₱ 24,000.00.

    Prepaid Rent 24,000.00


    Journal Entry upon
    24,000.00
    payment on Oct. 1, Cash
    2023 Paid one year rent in advance

    Adjusting Journal
    Rent Expense 6,000.00
    Entry at the end of
    the accounting Prepaid Rent 6,0000
    period Dec. 31, To record the expired rent for the year
    2023
    Practice Problem:
    Paid ₱36,000.00 one year insurance to commence
    August 1, 2023. The amount o premium was debited
    to Prepaid Insurance.

    Insurance Expense 15,000.00

    Prepaid Insurance 15,000.00

    To record the expired insurance for the year


    Unearned Income/ Revenue. Income already
    collected but not yet earned
    Received revenue in advance before service is
    rendered or goods are delivered.
    The entity incurred an obligation to perform
    services or deliver goods.
    Liability account = Unearned Revenue
    Practice Examples:
    1. On November 30, 2023, X Company received ₱
    36,000.00 advance rental for six months.

    2. Received ₱51,000.00 cash advance from a


    customer for one-year services to be rendered
    starting June 30, 2023. The amount are was
    credited to Unearned Services Income.
    Depreciation - allocation of the cost of the asset
    over its estimated useful life.
    3 Factors that we take note in the computation of
    depreciation
    1. Asset Cost- amount an entity paid to acquire the
    depreciable asset.
    2. Salvage value- amount that the asset can probably be
    sold for the end of its estimated useful life.
    3. Useful Life- estimated number of periods that an entity
    can make use of the asset.
    Formula:
    Cost ₱ XXXX.XX

    Less Salvage Value ₱ XXXX.XX


    Depreciable Cost ₱ XXXX.XX

    Divided by Estimated useful Life XXXX.XX


    Annual depreciation ₱ XXXX.XX
    Pro-forma entry, depreciation has standard entry to
    recognize depreciation for a year

    Pro-forma Depreciation Expense ₱ XXXX.XX

    entry
    Accumulated Depreciation ₱ XXXX.XX

    It means “for the sake of form”


    or “as a matter of form.
    • It indicates that a method of
    calculating financial results
    using certain projections or
    presumptions has been used.
    Problem examples:

    A building with an estimated useful life of 20 years


    finished construction on April 1, 2023. The cost of
    the building is ₱ 2,600.00 with an estimated salvage
    value of ₱ 200,000.00.

    Using the provided formula, let’s compute for the amount.


    Solution:
    Cost ₱ 2,600,000.00

    Less Salvage Value ₱ 200,000.00


    Depreciable Cost ₱ 2,400,000.00

    Divided by Estimated useful Life _____20 years


    Annual depreciation ₱ 120,000.00

    ₱ 120,000.00/12 X 9 months = ₱ 90,000.00


    Adjusting Depreciation Expense ₱ 90,000.00

    journal entry
    Accumulated depreciation ₱ 90,000.00
    on Dec. 31,
    2023 To record the depreciation expense for the building

    Practice Problem:

    In the beginning of the year, the company bought ₱


    20,000.00 equipment with five-year estimated life and a
    salvage value of ₱ 2,000.00. Depreciation is computed on
    a straight line basis.

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy