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Depreciation expense 5,000 Accumulated depreciation 5,000 Bad debts expense 1,000 Allowance for bad debts 1,000 Unearned rent income 3,000 Rent income 3,000 Utilities expense 4,000 Accrued utilities expense 4,000The books of Hope Enterprises showed the following adjusting entries at the end of the period: How much is the total amount for reversal at the start of the next fiscal year relating to these adjusting entries? (The reversing entry/ies serve/s as the solution for this problem)
Depreciation expense 5,000 Accumulated depreciation 5,000 Bad debts expense 1,000 Allowance for bad debts 1,000 Unearned rent income 3,000 Rent income 3,000 Utilities expense 4,000 Accrued utilities expense 4,000The books of Hope Enterprises showed the following adjusting entries at the end of the period:
How much is the total amount for reversal at the start of the next fiscal year relating to these adjusting entries? (The reversing entry/ies serve/s as the solution for this problem)
Expert Solution
Solution:- Reversing Enteries for the beginning of the year—
| Particulars | Debit | Credit |
|---|---|---|
| Rent Income Dr. | 3,000 | |
| To unearned rent income | 3,000 | |
| Accrued utilities expense. Dr | 4,000 | |
| To utilities expense | 4,000 | |
Therefore, total amount to be reversed according to the year ending adjusting enteries = 7,000
The reversing enteries are only prepared for accrued incomes, accrued expenses, unearned revenues and prepaid expenses. Thus, no reversing entry is prepared for Depreciation and Baddebt expenses.
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