Adjusting Entries
Selected Ledger Accounts Used by Cross Country Truck

question 63

Essay

Adjusting entries
Selected ledger accounts used by Cross Country 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.
$$\begin{array} { | l | l | l | l | l | l | } \hline 1 & \text { Cash } & 22 & \text { Notes Payable } & 41 & \text { Truck Rental Revenue } \\\hline 2 . & \text { Accounts Receivable } & 23 & \text { Dividends Payable } & 51 & \text { Advertising Expense } \\\hline 3 & \text { Office Supplies } & 24 & \text { Income Taxes Payable } & 52 & \text { Office Supplies Expense } \\\hline 4 & \text { Unexpired Insurance } & 25 & \text { Unearned Revenue } & 53 & \text { Rent Expense } \\\hline 5 & \text { Trucks } & 31 & \text { Capital Stock } & 54 & \text { Insurance Expense } \\\hline 6 & \text { Accumulated Depr. } & 32 & \text { Retained Earnings } & 55 & \text { Depreciation Expense: } \\\hline & \text { Expense Trucks } & 33 & \text { Dividends } & & \text { Trucks } \\\hline 21 & \text { Accounts Payable } & & & 56 & \text { Income Taxes Expense } \\\hline & & & & & \\\hline\end{array}$$ $\begin{array}{|l|l|c|c|}\hline & \text { Transactions } & \text { Account(s) } & \text { Accounts(s) } \\\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 issuing a note payable for the } \\\text { balance of the purchase price. }\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 { earned 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 { d) } & \begin{array}{l}\text { Made an adjusting entry for office supplies used } \\\text { during 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 { expenses at the end of a profitable period. }\end{array} & \\\hline\end{array}$

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Definitions:

Hourly Wages

Compensation paid to employees based on the number of hours worked, typically expressed as an amount of money per hour.

Affordable Health Care Act

A comprehensive health care reform law enacted in 2010 aimed at expanding access to insurance, increasing consumer protections, and emphasizing prevention and wellness.

Lower Premiums

Reduced costs for insurance coverage, often a result of decreased risk, loyalty discounts, or efficient company operations.

Profit-Sharing Plans

Compensation schemes where employees receive a portion of the company's profits, in addition to their regular salaries.