For the Following Independent Situations, Prepare the Required Adjusting Journal

question 39

Essay

For the following independent situations, prepare the required adjusting journal entries.
1. Bristol French Fry Company prepares monthly financial statements. On July 1, the Office Supplies account had a balance of $3,000. During July, additional office supplies were purchased for $3,800 and that amount was debited to Office Supplies Expense. On July 31, a physical count of office supplies revealed that there was $2,700 on hand. Prepare the adjusting journal entry that Bristol French Fry Company should make on July 31.
2. Hartland Bridge Co. prepares monthly financial statements. On September 1, a cheque for $9,600 was received from a tenant for six months' rent. The full amount was credited to Rental Revenue. Prepare the adjusting entry the company should make on September 30.

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Definitions:

Operating Cycle

The average period of time required for a business to convert its investments in inventory back into cash through the sale of goods or services.

Merchandise

Products or goods that are bought, sold, or traded within a retail environment.

Long-Term Assets

Assets that a company intends to hold for more than one year, including property, plant, and equipment.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the company's financial condition.