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Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

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EXERCISE 3-3

Purpose: (L.O. 5, 6, 7) This exercise will allow you to practice doing simple adjusting entries.

The unadjusted trial balance for the J. Lo Motorcycle Repair Shop, Inc. appears below (copied from the Solution to Exercise 2-5). Information needed for adjusting entries follows the trial balance.

J. LO MOTORCYCLE REPAIR SHOP, INC.

Trial Balance

August 31, 2014

images

Additional Information:

  1. An observation and count of supplies at August 31 shows $2,100 of unused items on hand.
  2. The shop received an utility bill of $80 for August. Payment is due by September 20. Roxy and Malcom decided to wait until September to make payment.

Instructions

Using the trial balance above:

(a) Prepare the appropriate adjusting entries.

(b) Prepare an adjusted trial balance at August 31, 2014.

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