LEGO Land Adjusted Trial Balance Dec 31,...

LEGO Land Adjusted Trial Balance Dec 31, 20-- ACCOUNT DEBIT CREDIT Bank 65,000 A/R - Gymboree 88,000 Inventory 0 Prepaid Cash Register Rental 2,000 Prepaid Computer Rental 3,000 Prepaid Lease 4,000 Display Cases 5,000 LEGO Sign 12,000 Accumulated Depreciation: LEGO Sign 2,000 Smart Car 26000 Accumulated Depreciation: Smart Car 6,000 Land 210,000 Bank Loan 200,000 A/P - Lego Inc. 14,000 A/P - Mercedes Toronto 15,000 A/P - Register Depot 16,000 A/P - The Sign Guys 10,000 L. Londoner, Capital 7,400 L. Londoner, Drawings Sales 2,500 250,000 Purchases 56,000 Freight In 6,500 Advertising Expense 10,000 Depreciation Expense 5,000 Maintenance Expense 3,000 Renovation Expense 12,000 Repair Expense 3400 Wages Expense 7000 Income Summary 0 520,400 520400

Transcript

00:01 In this question we are given with seven adjustments and we need to prepare adjusting entries.

00:11 So first transaction unexpired insurance.

00:20 So here the unexpired insurance at august 31 is 1800.

00:29 So we have to adjust the insurance expense.

00:34 So insurance expense should be debited because expense increases and prepaid insurance in the asset side should be credited because the value of prepaid insurance goes down.

00:54 So here in unadjusted trial balance we have the balance of 7200 as the unadjusted prepaid insurance and we have given with the balance of 1800.

01:08 So we should deduct this 1800 from the 7200 and we get 5400 as the adjusted value.

01:17 So which is prepaid insurance expense expired for till august 31.

01:25 So we are preparing it on august 31 and the second entry is we are given with supplies on hand.

01:32 We are given with 300 as on 31st august we have 300.

01:43 So we have to prepare the entries for supplies expense used.

01:48 So supplies expenses should be debited because the value of expenses goes up and supplies should be credited because the value of supplies has been decreased.

02:01 So here we already in unadjusted trial balance we have 9000 980 and here in supplies in hand we have 300.

02:10 So this should be deducted from the 1090.

02:13 So the total value will be 1060.

02:15 This should be adjusted.

02:22 Now the third entry is depreciation expense depreciation on building which is 7500.

02:34 So here we should debit the depreciation expense on building because the depreciation is an expense account and an increase in expense should always be debited.

02:48 So it will be 7500 here accumulated depreciation should be credited accumulated depreciation for building should be credited with 7500 because accumulated depreciation is a contra account which is contra asset...

Question

Please give Ace some feedback