Prepare the December 31 adjusting journal entries for Ortiz Company. Data for the end of the year adjustments are as follows:

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Prepare the December 31 adjusting journal entries for Ortiz Company. Data for the end of the year adjustments are as follows:

Prepare the December 31 adjusting journal entries for Ortiz Company. Data for the end of the year adjustments are as follows:
Factory overhead to be applied to work in process ending inventory $7,780
Interest receivable 435
Provision for uncollectible accounts 3,876
Office supplies consumed 750
Factory supplies consumed 4,160
Insurance expired on factory building and equipment 3,200
Depreciation on factory building 6,800
Depreciation on factory equipment 4,200

Answer & Explanation (1)

Explanation
The general journal is the book where entries are initially made relating to financial transactions entered into by the company.

The first journal entry is a debit to work in process inventory and a credit to factory overhead of $7,780 for the applied factory overhead.

The second journal entry is a debit to interest receivable and a credit to interest revenue $435 for the accrual of interest income earned.

The third journal entry is a debit to bad debts expense and a credit to allowance for doubtful accounts of $3,876 for the adjustment of estimated uncollectible accounts.

The fourth journal entry is a debit to office supplies expense and a credit to office supplies of $750 for the consumed office supplies.

The fifth journal entry is a debit to factory overhead subsidiary account on factory supplies expense and a credit to factory supplies of $4,160 for the consumed factory supplies.

The sixth journal entry is a debit to factory overhead subsidiary account on insurance expense and a credit to prepaid insurance of $3,200 for the expired portion of insurance for factory building and equipment.

The seventh journal entry is a debit to factory overhead subsidiary account on depreciation expense-factory building and a credit to accumulated depreciation-factory building of $6,800 for the depreciation of the factory building.

The last journal entry is a debit to factory overhead subsidiary account on depreciation expense-factory equipment and a credit to accumulated depreciation-factory equipment of $4,200 for the depreciation of the factory equipment.

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