Question

Required information:

- Borrowed $100,000 on 6/30/21; 5 years; 9% interest; Quarterly payments of $6282.

The last adjusted trial balance was on 9/30/22 having noted payable with a credit balance of $78,912.16

- Inventory Cost:

item1001: 180 @ $50

item1002: 200 @ $80

item1003: 140 @ $95

item1004: 52 @ $200

- Accounts Receivable has a debit balance of $6,792.19

For 12/31/22 record the following adjusting entrys:

1) Accrue interest on the loan (payment is due the 1st day of each quarter). [Hint: prepare a loan amortization table.]

2) The special order for K. Atkinson is 50% complete. (Cost of Goods Sold used to date = item1002: 2 @ $80 and item 1004: 1 @ $200)

3) You are also working on a special order for T. Courtway that is 80% complete. When done, you will charge $800 to customer. (Cost of Goods used to date = item1001: 1 @ $50 and item1004 1 @ $200) [Hint: dont worry about sales tax.]

4) After physical inventory, it is determined that one item of inventory 1002 is missing and believe stolen.

5) You estimate that 10% of your Accounts Receivable will be uncollectible (not including the unfinished job). Use Allowance Method.

The first 3 bullet points is information that can help claculate the amount for the journal entries (1-5). The question asked: Record Quarter 1 Adjusting Entries in the General Journal. (just numbers 1-5). Adjusting entries were last made on 9/30/22. Today is 12/31/22.

Answer 1

1. interest expense Dr $1,674

To accrued interest   $1,674

2. WIP a/c Dr $360

To Inventory a/c $360

3. WIP a/c Dr $250

To Inventory a/c $250

4. P&L Dr $80

To Inventory a/c $80

(Missing inventory)

5. Bad Debts a/c Dr $68

To Accounts receivable a/c $68