Adjustments and Closing Process-Basic Entries
Selected Ledger Accounts Used by Speedy

question 64

Essay

Adjustments and closing process-basic entries
Selected ledger accounts used by Speedy Truck Rentals, Inc., are listed along with identifying numbers. Following this list of account numbers and titles is a series of transactions. For each transaction, you are to indicate the proper accounts to be debited and credited.
$$\begin{array} { | l | l | l | l | l | l | } \hline 1 & \text { Cash } & 22 & \text { Notes Payable } & 41 & \text { Truck Rental Revenue } \\\hline 2 . & \text { Accounts Receivable } & 23 & \text { Dividends Payable } & 51 & \text { Advertising Expense } \\\hline 3 & \text { Office Supplies } & 24 & \text { Income Taxes Pay. } & 52 & \text { Office Supplies Expense } \\\hline 4 & \text { Unexpired Insurance } & 25 & \text { Unearned Revenue } & 53 & \text { Rent Expense } \\\hline 5 & \text { Trucks } & 31 & \text { Capital Stock } & 54 & \text { Insurance Expense } \\\hline 6 & \text { Accumulated Depr. } & 32 & \text { Retained Earnings } & 55 & \text { Depreciation Expense: } \\\hline & \text { Trucks } & 33 & \text { Dividends } & & \text { Trucks } \\\hline 21 & \text { Accounts Payable } & 35 & \text { Income Summary } & 56 & \text { Income Taxes Expense } \\\hline & & & & & \\\hline\end{array}$$ $\begin{array}{|c|c|c|c|}\hline & & \text { Account(s) } & \text { Accounts(s) } \\\hline & \text { Transactions } & \text { Debited } & \text { Credited } \\\hline & \begin{array}{l}\text { Example: Paid rent on the building for the current } \\\text { period. }\end{array} & 53 & 1 \\\hline \text { a) } & \begin{array}{l}\text { Trucks are purchased by making a } 30 \% \text { cash } \\\text { down payment and financing the rest for } 5 \text { years. }\end{array} & & \\\hline \text { b) } & \begin{array}{l}\text { Fee is received in advance, for rental of truck for a } \\\text { future period. }\end{array} & & \\\hline \text { c) } & \begin{array}{l}\text { Purchased a large quantity of office supplies on } \\\text { credit. }\end{array} & & \\\hline \text { d) } & \begin{array}{l}\text { Bought a three-year insurance policy and paid in } \\\text { full. }\end{array} & & \\\hline \text { e) } & \text { Declared a dividend to be paid in } 60 \text { days. } & & \\\hline \text { f) } & \text { Depreciation on trucks is recorded. } & & \\\hline \text { g) } & \begin{array}{l}\text { Adjusting entry is made to record liability to Daily } \\\text { News for advertising done this period; payment is } \\\text { due next month. }\end{array} & & \\\hline \text { h) } & \begin{array}{l}\text { Adjusting entry is made to record truck rentals } \\\text { eamed but not yet received or recorded. }\end{array} & & \\\hline \text { 1) } & \begin{array}{l}\text { Some portion of the truck rentals previously } \\\text { received in advance have now been earned. }\end{array} & & \\\hline \text { j) } & \begin{array}{l}\text { Made an adjusting for office supplies used during } \\\text { this period. }\end{array} & & \\\hline \text { k) } & \begin{array}{l}\text { Made an adjusting entry for the portion of the } \\\text { insurance premium which had expired. }\end{array} & & \\\hline \text { 1) } & \begin{array}{l}\text { Made an adjusting entry to accrue income taxes } \\\text { expense at the end of a profitable period. }\end{array} & & \\\hline \text { m) } & \begin{array}{l}\text { Closed the revenue account at the end of the } \\\text { period. }\end{array} & & \\\hline \text { n) } & \begin{array}{l}\text { Closed the Income Summary account at the end of } \\\text { a profitable period. }\end{array} & & \\\hline \text { 0) } & \begin{array}{l}\text { Closed the Dividends account at the end of the } \\\text { period. }\end{array} & & \\\hline\end{array}$