Ricardo's Garage wants to prepare financial statements for his company at the end of the January. But first, his accountant needs to make the following adjusting journal entries:
a. To recognize one month's depreciation on $60,000 of equipment on hand at the
beginning of the month. Ricardo assumes the equipment will have a 10-year life.
b. To recognize estimated bad debts. Ricardo wants to provide for additional bad debts
at the rate of 2% of the month's billings, which were $35,000 in January.
c. To recognize unpaid salaries of $1,200 for the last few days in January.
d. To recognize 3% interest earned for one-month on a $100,000 CD purchased on
December 31.
e. To recognize the expiration of one month's rent from three months' worth of rent of
$12,000 paid at the end of December

Required:
Prepare journal entries to record all of the adjustments.

Question

Ricardo's Garage wants to prepare financial statements for his company at the end of the January. But first, his accountant needs to make the following adjusting journal entries:
a. To recognize one month's depreciation on $60,000 of equipment on hand at the
beginning of the month. Ricardo assumes the equipment will have a 10-year life.
b. To recognize estimated bad debts. Ricardo wants to provide for additional bad debts
at the rate of 2% of the month's billings, which were $35,000 in January.
c. To recognize unpaid salaries of $1,200 for the last few days in January.
d. To recognize 3% interest earned for one-month on a $100,000 CD purchased on
December 31.
e. To recognize the expiration of one month's rent from three months' worth of rent of
$12,000 paid at the end of December
 
Required:
Prepare journal entries to record all of the adjustments.

Quizplus · Accepted Answer

The Answer of Ricardo's Garage wants to prepare financial statements for his company at the end of the January. But first, his accountant needs to make the following adjusting journal entries:
a. To recognize one month's depreciation on $60,000 of equipment on hand at the
beginning of the month. Ricardo assumes the equipment will have a 10-year life.
b. To recognize estimated bad debts. Ricardo wants to provide for additional bad debts
at the rate of 2% of the month's billings, which were $35,000 in January.
c. To recognize unpaid salaries of $1,200 for the last few days in January.
d. To recognize 3% interest earned for one-month on a $100,000 CD purchased on
December 31.
e. To recognize the expiration of one month's rent from three months' worth of rent of
$12,000 paid at the end of December
 
Required:
Prepare journal entries to record all of the adjustments.

Ricardo's Garage Wants to Prepare Financial Statements for His Company