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Katherine Said:

Accounting Adjusting Data! HELP!?

We Answered:

Adjusting entries needed

1. Bad Debts is estimated to be 10% of net sales. (Net sales are 2,000 - 800; You need to deduct 10% of that)
2. Interest earned on notes on hand is $35. (This needs to be added as Other Income)
3.Depreciation rate of fixed assets is $10. (This needs to be added to Accu. Dep.)
5. Insurance expense balance represents insurance premium for 3 months paid on Dec.1 2010. (Since 450 was for 3 months you need to add 1/3 of that (150) to Insurance Expense)
6. Unearned commission income, $150. (This needs to be added to Sales)
7. Unsold merchandise at the end of the period, $5000. (Since inventory over this amount has already been sold, you need to deduct 3,000 from Merchandise inventory)