Japan Chamber of Commerce Bookkeeping Grade 3 | Closing Adjustments 02

The answer is Dr. Depreciation expense 60,000 / Cr. Accumulated depreciation of equipment 60,000 — the closing adjustment for recording depreciation of 60,000 yen on equipment for the period by the indirect method.

The answer is Dr. Provision for doubtful accounts 10,000 / Cr. Allowance for doubtful accounts 10,000 — the closing adjustment for adding 10,000 yen to the allowance for doubtful accounts on trade receivables.

The answer is Dr. Allowance for doubtful accounts 8,000 / Cr. Accounts receivable 8,000 — the entry when accounts receivable of 8,000 yen arising in the previous period become bad and the allowance covers at least that amount.

The answer is Dr. Purchases 90,000 / Cr. Merchandise inventory 90,000 — the entry for transferring opening inventory of 90,000 yen to the purchases account.

The answer is Dr. Merchandise inventory 110,000 / Cr. Purchases 110,000 — the entry for transferring closing inventory of 110,000 yen to merchandise inventory.

The answer is Dr. Prepaid insurance 24,000 / Cr. Insurance expense 24,000 — the entry for deferring the 24,000 yen of insurance already paid that relates to the following period.

The answer is Dr. Insurance expense 24,000 / Cr. Prepaid insurance 24,000 — the reversing entry at the start of the period for prepaid insurance of 24,000 yen at the end of the previous period.

The answer is Dr. Rent expense 30,000 / Cr. Accrued rent 30,000 — the entry for accruing unpaid rent of 30,000 yen relating to the current period.

The answer is Dr. Accrued rent 30,000 / Cr. Rent expense 30,000 — the reversing entry at the start of the period for accrued rent of 30,000 yen at the end of the previous period.

The answer is Dr. Interest receivable 5,000 / Cr. Interest income 5,000 — the entry for accruing interest of 5,000 yen earned in the current period but not yet received.

The answer is Dr. Rent income 20,000 / Cr. Unearned rent 20,000 — the entry for deferring the 20,000 yen of rent already received that relates to the following period.

The answer is Dr. Cash over and short 3,000 / Cr. Miscellaneous income 3,000 — the entry when a credit balance of 3,000 yen on cash over and short remains unexplained at the closing date.

The answer is Dr. Miscellaneous loss 2,000 / Cr. Cash over and short 2,000 — the entry when a debit balance of 2,000 yen on cash over and short remains unexplained at the closing date.

The answer is Dr. Stores 6,000 / Cr. Communication expenses 6,000 — the entry for transferring 6,000 yen of unused postage stamps to an asset at the closing date.

The answer is Dr. Income taxes 40,000 / Cr. Prepaid income taxes 15,000, Income taxes payable 25,000 — the closing adjustment when income taxes are finalised at 40,000 yen and 15,000 yen has already been paid.

The answer is 1,200,000 yen, the gross profit when sales are 2,000,000 yen and cost of sales is 800,000 yen.

The answer is 750,000 yen, the operating profit when gross profit is 1,200,000 yen and selling, general and administrative expenses are 450,000 yen.

The answer is 400,000 yen, the net assets when assets are 1,000,000 yen and liabilities are 600,000 yen.

The answer is 150,000 yen, the annual charge on the straight-line method for an acquisition cost of 600,000 yen, no residual value and a useful life of four years.

The answer is that the debit total and the credit total agree, the relationship that always holds in a trial balance because of the way double-entry bookkeeping works.