Chapter 5

Accrual accounting adjustments

Practice Problems
Practice Problem A
Adjust?
a

Journal entry
DR

Accounts receivable

CR
b

DR

Revenue
Cost of goods sold expense

CR
c

DR

Unearned revenue

DR
CR

DR

DR

1,900
3,900
3,900
62,320

Maintenance expense
Audit expense

CR
f

1,900

Revenue
Store building (asset)

62,320
2,350

Accounts payable
Automobile (asset)

CR

$
3,200

Inventory

CR
d

$
3,200

2,350
17,220

Accounts payable

Practice Problem B
1

18,000 (17,000 + 3,000 2,000)

8,000

5,000 (4,500 + 3,000 2,500)

2,000 (0 + 2,000 0)

1,000 (2,000 2)

1 January 2011, i.e. motor vehicle depreciation is $5,000 per year (change in
accumulated depreciation)

17,220

Trotman: Financial Accounting 5e Practice Problem Solutions

Practice Problem C
1

Revenues:
Sales

Expenses:
COGS
Interest (200,000 x 10%)
Wages (180,000 + 40,000)
Electricity
Insurance (24,000 x 9/12)

600,000 56,000 + 220,000 60,000 + 200,000

8,000 180,000 + 80,000 24,000 = $772,000

$340,000
$
120,000
20,000
220,000
22,000
18,000

2013 Cengage Australia Pty Limited

Trotman: Financial Accounting 5e Practice Problem Solutions

Appendix Practice Problem A

1 Postings to general ledger and subsidiary ledgers:

Balance
Sales
Balance b/d

Creditors
1,400

Bank

Balance
Sales
Balance
Sales
Balance
Sales
Balance b/d

Bank

Bank

GENERAL LEDGER
Debtors
2,100
Bank
1,600
2,200

1,500

Balance
Purchases
Balance b/d

DEBTORS LEDGER
Xavier
400
Bank
700
Young
800
Bank
300
Zoeller
900
Bank
600
1,200

1,800
6,600
7,000

400

800

300

CREDITORS LEDGER
Adler
600
Balance
Purchases
Balance b/d

1,000
5,000
5,400

Barnes
800
Balance
Purchases
Balance b/d

800
1,600
1,600

2013 Cengage Australia Pty Limited

Trotman: Financial Accounting 5e Practice Problem Solutions

2 Supporting schedules:

Schedule of debtors at 31 January 2012

Xavier
Young
Zoeller
Schedule of creditors at 31 January 2012
Adler
Barnes

2013 Cengage Australia Pty Limited

$
700
300
1,200
2,200
$
5,400
1,600
7,000