Adjusting Entries for Ace Computer Services: Accounting Assignment – E3-8

Summary

Adjusting entries are needed to update the accounts at the end of an accounting period. Students see how to prepare them for Ace Computer Services and Mason Advertising Agency.

Ace Computer Services

Andy Roddick is the new owner of Ace Computer Services. He is preparing monthly financial statements for August 2014. He needs to record unpaid wages, estimated utility bills, interest on a mortgage, and an unpaid telephone bill.

Adjusting Entries for Ace

Students prepare the adjusting journal entries for Ace Computer Services. They record the unrecorded expenses that the business incurred during August. They complete a table with account titles and amounts.

Mason Advertising Agency

Mason Advertising Agency was founded in January 2010. Students see the adjusted and unadjusted trial balances for December 31, 2014. They prepare an income statement, a statement of retained earnings, and a balance sheet.

Adjusting Entries for Mason

Students journalize the annual adjusting entries for Mason Advertising Agency. They answer questions about interest rates and salaries.

Key terms

adjusting entries

Journal entries made at the end of an accounting period to update accounts.

trial balance

A list of all the accounts in the general ledger with their balances.

income statement

A financial statement showing revenues, expenses, and net income.

statement of retained earnings

A financial statement showing the changes in retained earnings over a period.

balance sheet

A financial statement showing assets, liabilities, and stockholders' equity.

unrecorded expenses

Expenses that have been incurred but not yet recorded in the accounts.

Questions this document helps with

• What adjusting entries does Ace Computer Services need to make?
• How do you prepare an income statement from a trial balance?
• What is the difference between an adjusted and an unadjusted trial balance?

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