# CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 14-2 Beginning an 8-Column Work Sheet for a Merchandising Business.

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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 14-2 Beginning an 8-Column Work Sheet for a Merchandising Business

CENTURY 21 ACCOUNTING © Thomson/South-Western 2 LESSON 14-2 RECORDING A TRIAL BALANCE ON A WORK SHEET page 410 1 3 2 1.Account title 2.Account balance 3.Total, prove, and rule the debit and credit columns

CENTURY 21 ACCOUNTING © Thomson/South-Western ANALYZING AND RECORDING SUPPLIES ADJUSTMENTS 1. How many supplies are on hand at the end of the month? \$750 2. What is the current balance in the supplies account? \$3480.00 3. What must be done to make it have this balance? \$3480 - \$750 = adjustment of \$2730 4. What adjustment is made? Credit Supplies for \$2730 and Debit Supplies Expense for \$2730

CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 14-2 ANALYZING AND RECORDING SUPPLIES ADJUSTMENTS page 411 Adj. (a)2,730.00 Supplies Expense—Office Dec. 31 Bal.3,480.00Adj. (a)2,730.00 (Adj Bal. 750.00) Supplies — Office Adj. (b)2,910.00 Supplies Expense — Store Dec. 31 Bal.3,944.00Adj. (b) 2,910.00 (Adj Bal.1,034.00) Supplies — Store

CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 14-2 RECORDING SUPPLIES ADJUSTMENTS ON A WORK SHEET page 412 1.Write the debit amounts in the Adjustments Debit column. 2.Write the credit amounts in the Adjustments Credit column. 3.Label the two parts of the Supplies—Office adjustment with small letter a and small letter b in parentheses.

CENTURY 21 ACCOUNTING © Thomson/South-Western ANALYZING AND RECORDING PREPAID INSURANCE ADJUSTMENTS 1. What is the value of insurance at the end of the month? \$2630 2. What is the current balance in the supplies account? \$5800 3. What must be done to make it have this balance? \$5800 - \$2630 = adjustment of \$3170 4. What adjustment is made? Credit Prepaid Insurance for \$3170 and Debit Insurance Expense for \$3170

CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 14-2 ANALYZING AND RECORDING A PREPAID INSURANCE ADJUSTMENT page 413 1.Enter the amount of insurance used in the Adjustments Credit column. 2.Enter the same amount in the Adjustments Debit column. 3.Label the two parts of the adjustment with a small letter c in parentheses. STOP HERE… Merchandise Inventory

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 14-3 Planning and Recording a Merchandise Inventory Adjustment

CENTURY 21 ACCOUNTING © Thomson/South-Western 9 LESSON 14-3 MERCHANDISE INVENTORY page 415

CENTURY 21 ACCOUNTING © Thomson/South-Western ANALYZING AND RECORDING MERCHANDISE INVENTORY 1. What is the value of inventory at the end of the month? \$124,640 2. What is the current balance in the inventory account? \$140,480 3. What must be done to make it have this balance? \$140,480 - \$124,640 = adjustment of \$15,840 4. What adjustment is made? Credit Merchandise Inventory for \$15,840 and Debit Income Summary for \$15,840

CENTURY 21 ACCOUNTING © Thomson/South-Western 11 LESSON 14-3 ANALYZING AND RECORDING A MERCHANDISE INVENTORY ADJUSTMENT page 416 1.Write the debit amount. 3.Label the two parts of this adjustment with a small letter d in parentheses. 2.Write the credit amount.

CENTURY 21 ACCOUNTING © Thomson/South-Western ANALYZING AND RECORDING MERCHANDISE INVENTORY 1. What is the value of inventory at the end of the month? \$208,000 2. What is the current balance in the inventory account? \$294,700 3. What must be done to make it have this balance? \$208,000 - \$294,700 = adjustment of \$4,200 4. What adjustment is made? Debit Merchandise Inventory for \$4,200 and Credit Income Summary for \$4,200

CENTURY 21 ACCOUNTING © Thomson/South-Western 13 LESSON 14-3 ANALYZING AN ADJUSTMENT WHEN ENDING MERCHANDISE INVENTORY IS GREATER THAN BEGINNING MERCHANDISE INVENTORY page 417 Jan. 1 Bal.294,700.00 Adj. (d)4,200.00 (New Bal.298,900.00) Merchandise Inventory Adj. (d)4,200.00 Income Summary STOP HERE… Uncollected Accounts

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 14-4 Planning and Recording an Allowance for Uncollectible Accounts Adjustment

CENTURY 21 ACCOUNTING © Thomson/South-Western 15 LESSON 14-4 Estimated Uncollectible Accounts Expense =Percentage× Total Sales on Account \$1,245.00=1%×\$124,500.00 ESTIMATING UNCOLLECTIBLE ACCOUNTS EXPENSE page 420 Estimate the value of uncollectible accounts. 1. The answer becomes the amount DEBIT to Uncollectible Accounts Expense. 2. The CREDIT is recorded in Allowance for Uncollectible Accounts

CENTURY 21 ACCOUNTING © Thomson/South-Western 16 LESSON 14-4 1.Enter the estimated uncollectible amount. ANALYZING AND RECORDING AN ADJUSTMENT FOR UNCOLLECTIBLE ACCOUNTS EXPENSE 3.Label the two parts with a small letter e in parentheses. page 421 2.Enter the same amount in the Adjustments Debit column.