FABM1_Q2-CH1-ADJUSTING-ENTRIES PDF

SHS Fundamentals of Accountancy, Business and Management 1 Module 9 1 ABM-FABM1 Grade 11: Module 9 First Edition, 2021 Copyright © 2021 La Union Schools Division Region I All rights reserved. No part of this module may be reproduced in any form without written perm...

SHS Fundamentals of Accountancy, Business and Management 1 Module 9 1 ABM-FABM1 Grade 11: Module 9 First Edition, 2021 Copyright © 2021 La Union Schools Division Region I All rights reserved. No part of this module may be reproduced in any form without written permission from the copyright owners. Development Team of the Module Author: Joselito O. Dumocmat, MT II Editor: SDO La Union, Learning Resource Quality Assurance Team Illustrator: Ernesto F. Ramos Jr., P II Management Team: Atty. Donato D. Balderas, Jr. Schools Division Superintendent Vivian Luz S. Pagatpatan, Ph.D Assistant Schools Division Superintendent German E. Flora, Ph.D, CID Chief Virgilio C. Boado, Ph.D, EPS in Charge of LRMS Lorna O. Gaspar, EPS in Charge of ABM Michael Jason D. Morales, PDO II Claire P. Toluyen, Librarian II 2  Target International Accounting Standards 8 stated that Accounting Policies, Changes in Accounting Estimates and Errors is applied in selecting and applying accounting policies, accounting for changes in estimates and reflecting corrections of prior period errors. The Matching Principle Concept also stated that income and their related expenses must be recognized in the same accounting period. The purpose of which is to avoid misstating the reported income and expenses. Adjusting entries are the last step in the accounting cycle before the preparation of the financial statements. It is also called the correcting entries. Adjusting or correcting entries are entries made to correct an already existing entry of the journal or ledger in terms of account and/or amount. The purpose of which is to properly separates the earned portion of the amount recorded from the liability portion in the case of income, and expenses portion of the prepaid asset in the case of expenses. This learning material enables you to: 1. prepare adjusting entries of a service activity (ABM_FABM11- IVa-d -33); 2. complete the accounting cycle of a service activity (ABM_FABM11- IVa-d -34); 3. prepare adjusting entries of a merchandising business (ABM_FABM11- IVe-j -39); and, 4. completes the accounting cycle of a merchandising business (ABM_FABM11- IVe- j -40).  Jumpstart For you to be understand the lesson well, do the following activities. Have fun and good luck! Pretest Direction: Select the letter of the best answer. Use a separate bond paper. 1. What kind of entry is use to correct an unrecorded amount at the end of the calendar year? A. Adjusting entry B. Closing entry C. Journal entry D. Reversing entry 2. What kind of entry is use to revert back to the old accounting practice after the preparation of the adjusting entries? A. Adjusting entry B. Closing entry C. Journal entry D. Reversing entry 3. What kind of entry is use to add or deduct the income (loss) to the Owner’s Equity? A. Adjusting entry B. Closing entry C. Journal entry D. Reversing entry 4. Which of the following entry is considered historical in nature? A. Entry made B. Adjusting entry C. Reversing entry D. Should be entry 5. The bookkeeper of ABC Merchandising made this journal entry. Purchases 25,000 Accounts payable 25,000 The amount listed on the voucher was 52,000. What is the adjusting entry? A. Accounts payable 25,000 Purchases 25,000 B. Purchases 25,000 Accounts payable 25,000 C. Accounts payable 27,000 Purchases 27,000 D. Purchases 27,000 Accounts payable 27,000 6. MNO Computer Shop collected a total computer rent of PHP2,340 for the day on December 31, 2019 but was not recorded in the book. If the book was closed on the same day, what will be the adjusting entry? A. Cash 2,340 Rental Income 2,340 B. Cash 2,340 Income (loss) Summary 2,340 C. Cash 2,340 MNO Capital 2,340 D. Income (loss) Summary 2,340 Cash 2,340 7. MNO Computer Shop collected a total computer rent of PHP3,250 for the day on December 31, 2019 but was not recorded in the book. If the book is still open on January 1, 2020, what will be the adjusting entry? A. Cash 3,250 Rental Income 3,250 B. Cash 3,250 Income (loss) Summary 3,250 C. Cash 3,250 MNO Capital 3,250 D. Income (loss) Summary 3,250 Cash 3,250 8. A bookkeeper recorded a salary expense by debiting a salary expense of 5,000 and crediting cash of the same amount. What is the adjusting entry if the amount of salary is overstated by 1,250? A. Salary expense 1,250 Cash 1,250 B. Cash 1,250 Salary expense 1,240 C. Salary expense 6,250 Cash 6,250 D. Cash 6,250 Salary expense 6,250 9. A bookkeeper recorded a salary paid by debiting a salary expense of 5,000 and crediting cash of the same amount. What is the adjusting entry if the amount of salary is understated by 1,250? A. Salary expense 1,250 Cash 1,250 B. Cash 1,250 Salary expense 1,240 C. Salary expense 3,750  Cash 3,750 D. Cash 3,750 Salary expense 3,750 10. You recorded the payment of utility expense amounting, PHP1,450 in the general journal twice. Assuming that your entries were: Debit – Utility expense 1,450; Credit – Cash 1,450. What is the adjusting entry? A. Utility expense 1,450 Cash 1,450 B. Cash 1,450 Utility expense 1,440 C. Utility expense 2,880 Cash 2,880 D. Cash 2,880 Utility expense 2,880 Activity 1: Read me! Understand me! Directions: Read and understand the notes below. The topics here are applicable for both service oriented and merchandising business. It is divided into, a.) Adjusting Entry, b.) Financial Statements, c.) Closing entry, and d.) Reversing entry. 15 minutes. A. Adjusting Entry Your performance on Adjusting entry topic depends on how you will understand and analyze these three journal entries. Entry made: This is the entry made to record the transactions. This could be the entry in the General Journal, Cash Receipts Journal, Cash Disbursement Journal, Purchase Journal or Sales Journal. It may be a correct entry or wrong entry. Example. Purchase a life insurance, PHP12,000. The company is the beneficiary of the insurance. March 1, 2019 Insurance expense 14,000 Cash 14,000 To record the insurance paid in cash Should be Entry: This entry is the correct entry. Correct entry is correct as to the account title used and amount. Example: December 31, 2019 Insurance expense 12,000 Cash 12,000  To record the correct amount, purchase last 3/1/2019 Adjusting or Correcting Entry: This entry is use to correct the wrong entry made. If the error pertains to the account title, the account title use will be debited or credited to correct the account title and write the correct one. If the entry made contains the correct account title but contain an error in the amount, the amount is either added or subtracted to arrive to the correct amount. Adjusting entry: December 31, 2019 Cash 2,000 Insurance expense 2,000 To record the adjusting entry computed as follows: Insurance expense recorded 14,000 Correct amount 12,000 ---------- Adjustment 2,000 ======= Notes: 1. Cash is debited to bring back the over deduction of 2,000 while insurance expense is credited to lessen the over recording of 2,000. B. Financial Statements Financial statements are written records that conveys to the financial statements users the results of operation and financial standing of the company. The term comprises three statements, Statement of Financial Position, Statement of Comprehensive Income and Statement of Cash Flows. These statements are prepared for both the merchandising and service-oriented businesses. Statement of Comprehensive Income (SCI) is a statement prepared for a specific period while the Statement of Financial Position is a statement prepared as of a certain date. The following steps are followed in preparing the Statement of Comprehensive income and the Statement of Financial Position: a. Journalize the transactions = this is the recording of transactions by means of journal entries. b. Posting = classifying the transactions by putting together the same transactions in the same account. Included in this stage is the footing to determine the balance per account. c. Prepare Unadjusted Trial Balance = prepare the unadjusted trial balance in a worksheet. Compute the totals then double rule. d. Prepare Adjusting Entries = prepare the necessary adjusting entries at year end. Double rule the totals. e. Prepare Adjusted Trial Balance = add or deduct the adjustments to arrive at the adjusted trial balance. Double rule the totals. f. Prepare Statement of Comprehensive Income = from the Adjusted Trial Balance, forward all nominal accounts to these columns then foot. A greater amount on the credit side shows a net income while a greater amount on the debit side shows a net loss. Make an account for the difference as Net Income (Loss). The net income (loss) is  forwarded to Statement of Financial Position. Foot the totals then double rule. g. Prepare Statement of Financial Position = the real accounts from the Adjusted Trial Balance are forwarded to the Statement of Financial Position. Foot and double rule the totals. The Statement of Comprehensive Income (SCI) and Statement of Financial Position (SFP) can be prepared in a separate sheet of bond paper to make it formal. The Statement of Cash Flows can be prepared using the Statement of Comprehensive Income (SCI) and Statement of Financial Position (SFP). This topic is thoroughly discussed in the previous quarter. Closing Entries These entries are prepared before the preparation of the financial statements. There are two instances where a closing entry could be made. These are, a.) the books are not yet close, and b.) the books are already close. A. Books not yet closed Nominal accounts are close to Income (Loss) Summary Account. These accounts are considered temporary accounts because these will be closed to the Income (Loss) Summary Account at the end of the calendar year. It just like transferring all the expenses in the debit side of a T-account and the income on the credit side of the same account. This is the one considered in FABM 1 and 2. The Income (Loss) Summary Account will also be closed to the Owner’s Equity. B. Books already closed Book is considered closed after the Accountant have prepared the financial statements for the calendar year. In this case, the nominal accounts are then close to the Owner’s Equity. This practice will be discussed later in higher accounting subjects. Reversing Entry These entries are made to deal with real accounts due to the adjusting entries made. It has the effect of making the balance of these accounts to zero. This can be done by simply debiting what was credit or crediting what was debited. This practice is in accordance with the Consistency Principle which states that a company cannot just jump from one accounting practice to another accounting practice. Discover To better understand adjusting entries, it is important to note that the financial statements use Accrual Method in recording transactions. This method dictates that expenses are recorded when incurred regardless of when paid and income is also recognized when earned regardless of when received. Accrual accounting uses terms that are exclusively for Accountants. These terms are enumerated and defined below for your ready references. Depreciation It is a method of allocating the cost of the fixed assets over its useful life. There are different methods of computing depreciation but this learning material focuses only on the straight-line method. The other methods will be discussed in the higher accounting subjects. The formula in computing annual depreciation using the straight-line method is presented below: 𝐶𝑜𝑠𝑡−𝑆𝑐𝑟𝑎𝑝 𝑉𝑎𝑙𝑢𝑒 𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑙𝑖𝑓𝑒 where: Cost – is the purchase price plus any incidental expenses to put the asset in use Scrap value – is the estimated amount the fixed asset can be purchased after its useful life Estimated life – is the number of years the fixed asset can be of valuable use. Example: ABC Merchandise purchased a delivery truck worth PHP300,000. An amount of PHP5,000 is needed to process the transfer to the asset to the name of the company. The delivery truck is estimated to be of service to the company for 15 years after which it can be sold for PHP5,000. What is the annual depreciation? 𝐶𝑜𝑠𝑡 − 𝑆𝑐𝑟𝑎𝑝 𝑉𝑎𝑙𝑢𝑒 𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑙𝑖𝑓𝑒 305,000−5,000 𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = = 20,000 15 𝑦𝑒𝑎𝑟𝑠 The annual depreciation is recorded as: Depreciation expense 20,000 Accumulated depreciation – Delivery truck 20,000 Adjustment in the depreciation is caused by a mistake in the estimated life or error in the computation. If the case is due to error in the computation (Assume that the computed Annual Depreciation is PHP20,333.33), here is the adjusting entry: Entry Made: Depreciation expense 23,333.33 Accumulated depreciation – Delivery truck 23,333.33 Should be entry: Depreciation expense 20,000 Accumulated depreciation – Delivery truck 20,000 Adjusting entry: Accumulated depreciation – Delivery truck 3,333.33 Depreciation expense 3,333.33 Deferred Expenses These are expenses already incurred but not yet paid. This account is a liability account. Example:  ABC Computer Shop pay its rent every 15 th day of the month amounting to PHP10,000. The November 16 to December 15, 2019 rent was paid last December 15, 2019 while December 16, 2019 – January 15, 2020 is still outstanding as of the end of December 31, 2019. The bookkeeper recorded the unpaid rent as: Rent expense 10,000 Rent payable 10,000 What is the adjusting entry? Entry made: Rent expense 10,000 Rent payable 10,000 Should be entry: Rent expense 5,000 Deferred rent expense 5,000 Adjusting entry: Rent payable 5,000 Rent expense 5,000 Note: Only ½ of the monthly rate of PHP10,000 was incurred but not yet paid. This liability is recognized by the Deferred rent expense entry. Deferred Income An income already received but not yet earned. This is a liability account. Example: Lito Jose owns an apartment that he leases to different tenants. The contract of lease specifies that tenants will pay in advance. Dina Maganda started leasing the apartment last December 16, 2019 for the amount of PHP30,000 per month. Lito Jose records the transaction last December as debit to Cash 30,000 and credit Rent Income 30,000. What is the adjusting entry at the end of the year? Entry made: Cash 30,000 Rent Income 30,000 Should be entry: Cash 30,000 Rent Income 15,000 Deferred Rent Income 15,000 Adjusting Entry: Rent Income 15,000 Deferred Rent Income 15,000 Note: The rent income recorded upon collection of the lease contract is overstated at the end of the calendar year. It must be adjusted by PHP15,000 as a Deferred Rent Income. Prepaid Expenses  These are expenses already paid but not yet incurred. This is an asset account. Example: TXT Computer Shop purchase a coupon bonds worth PHP10,000 on December 1, 2019. At the end of the calendar year, actual inventory showed that only ¼ of the entire amount were used. What is the adjusting entry at the end of the calendar year if the transaction was recorded as debited to Prepaid Supplies 10,000 and credit to Cash 10,000? Entry made: Prepaid Supplies 10,000 Cash 10,000 Should be entry: Supplies expense (1/4 x 10,000) 2,500 Prepaid supplies 2,500 Adjusting entry: Supplies expense (1/4 x 10,000) 2,500 Prepaid supplies 2,500 Note: The Prepaid Supplies was overstated by PHP2,500 at the end of the calendar year. The used portion is accounted as Supplies Expense. Accrued Income Are income already earned but not yet received. This is an asset account. Example: YOU is engaged in a lending business. The interest rate is 3% per month and the whole amount including the interest will be paid at the end of every 3 months. ME borrowed PHP10,000 last November 1, 2019. YOU recorded the transaction as follows: Interest receivable (3% x 10,000 x 3) 900 Loan receivable 10,000 Cash 10,000 Interest Income 900 What is the adjusting entry? Entry made: Interest receivable (3% x 10,000 x 3) 900 Loan receivable 10,000 Cash 10,000 Interest Income 900 Should be entry: Interest receivable 900 Loan receivable 10,000 Cash 10,000 Interest Income 900 Adjusting entry: Accrued Interest receivable 600 Interest Income 300 Interest receivable 900 Note: The interest income is overstated by PHP300 representing the interest for the month of January in the following year that is why it is debited to arrive at the correct amount of PHP300. The interest receivable is also an error as of the end of calendar year that is the reason why it is credited with the whole amount of PHP900. To counter balance the effect on the debit side Accrued Interest receivable is debited. Explore Now that you have learned the basic concepts of Adjusting Entries, solve the activities for you to explore the different possibilities. Activity 1. Direction: Select the letter of the best answer. Use a bond paper to write your answer. 25 minutes. 1. A desktop computer was purchased by XYZ Merchandising Company amounting to PHP25,000 last July 1, 2019. The computer is estimated to have a useful life 5 years. The straight-line method was used to compute the depreciation. The bookkeeper made this entry last December 31, 2019: Depreciation expense 5,000 Accumulated depreciation – computer 5,000 What is the adjusting entry at the end of the calendar year December 31, 2019? A. Accumulated Depreciation – computer 2,500 Depreciation Expense 2,500 B. Accumulated Depreciation – computer 5,000 Depreciation Expense 5,000 C. Depreciation expense 5,000 Accumulated Depreciation – computer 5,000 D. Depreciation expense 2,500  Accumulated Depreciation – computer 2,500 2. Lito Jose, a sole proprietor bought an insurance for the computers used in his business, PHP12,000 last October 1, 2019. The bookkeeper made this entry: Prepaid Insurance 12,000 Cash 12,000 What is the insurance expense at the end of the year? A. PHP3,000 B. PHP5,000 C. PHP6,000 D. PHP9,000 3. Loida Regular, a sole proprietor bought an insurance for the inventory of his business, PHP24,000 last October 1, 2019. The bookkeeper made this entry: Prepaid Insurance 24,000 Cash 24,000 What is the adjusting entry at the end of the year? A. Prepaid Insurance 6,000 Insurance expense 6,000 B. Insurance expense 6,000 Prepaid insurance 6,000 C. Prepaid Insurance 24,000 Insurance expense 24,000 D. Insurance expense 24,000 Prepaid insurance 24,000 4.Jessica Jose owns an apartment that he leases to different tenants. The contract of lease specifies that tenants will pay in advance. Dina Maganda started leasing the apartment last December 16, 2019 for the amount of PHP30,000 per month. Jessica Jose recorded the transaction last December as debit to Cash 30,000 and credit Deferred Rent Income 30,000. What is the correct rent income for the year 2019? A. PHP7,500 B. PHP15,000 C. PHP22,500 D. PHP30,000 5.Julie Jose owns an apartment that he leases to different tenants. The contract of lease specifies that tenants will pay in advance. Dina Maganda started leasing the apartment last December 16, 2019 for the amount of PHP30,000 per month. Jessica Jose recorded the transaction last December as debit to Cash 30,000 and credit Deferred Rent Income 30,000. What is the adjusting entry at the end of the year? A. Deferred Rent Income 7,500 Rent Income 7,500 B. Rent Income 7,500 Deferred Rent Income 7,500 C. Deferred Rent Income 15,000 Rent Income 15,000 D. Rent Income 15,000 Deferred Rent Income 15,000 Now that you have mastered the lesson, are you ready to summarize?  Deepen The Trial Balance of Jesus Jose Mini Mart & General Merchandise is prepared by the bookkeeper last December 31, 2019. (60 minutes) Debit Credit Cash in bank 75,000 Accounts Receivable 100,000 Notes Receivable 200,000 Merchandise Inventory 50,000 Delivery Truck 300,000 Display Cabinets 100,000 Accounts Payable 45,000 Notes Payable 150,000 Jesus Jose Capital 223,000 Sales 500,000 Sales discounts 1,000 Salaries and wages 50,000 Store supplies expense 7,000 Maintenance expense 15,000 Utilities expenses 20,000 ------------ ------------- Totals 918,000 918,000 ======= ======== Notes for adjustment (First: Assume the books are still open; Second: assume that the books are closed) 1. The delivery truck is not provided with depreciation. It was purchased last April 1, 2019. The estimated life is 20 years with no residual value. It is the policy of the company to depreciate its assets using the straight-line method. 2. The display cabinet was purchase January 1, 2019. Estimated life is 5 years. Straight line method is to be used. 3. Cash sales amounting to PHP56,000 last December 31, 2019 was unrecorded. 4. Salaries and wages are overstated by PHP10,000. 5. Monthly amortization on the notes payable amounting to PHP10,000 was paid by check during December but not yet recorded. Direction: Answer the following questions in a separate bond paper. Show the entry made, should be entry and adjusting entry. 1. What is the adjusting entry for delivery truck? 2. What is the adjusting entry for display cabinet? 3. What is the adjusting entry for the unrecorded sales? 4. What is the adjusting entry for overstated salaries and wages? 5. What is the adjusting entry for the unrecorded monthly amortization payment? Great job. You are almost done with this module. Keep it up.  Gauge Direction: Select the letter of the best answer. Use a separate bond paper. (20 minutes) 1. MNO Computer Shop collected a total computer rent of PHP2,340 for the day on December 31, 2019 but was not recorded in the book. If the book was closed on the same day, what will be the adjusting entry? E. Cash 2,340 Rental Income 2,340 F. Cash 2,340 Income (loss) Summary 2,340 G. Cash 2,340 MNO Capital 2,340 H. Income (loss) Summary 2,340 Cash 2,340 2. MNO Computer Shop collected a total computer rent of PHP3,250 for the day on December 31, 2019 but was not recorded in the book. If the book is still open on January 1, 2020, what will be the adjusting entry? E. Cash 3,250 Rental Income 3,250 F. Cash 3,250 Income (loss) Summary 3,250 G. Cash 3,250 MNO Capital 3,250 H. Income (loss) Summary 3,250 Cash 3,250 3. A bookkeeper recorded a salary expense by debiting a salary expense of 5,000 and crediting cash of the same amount. What is the adjusting entry if the amount of salary is overstated by 1,250? E. Salary expense 1,250 Cash 1,250 F. Cash 1,250 Salary expense 1,240 G. Salary expense 6,250 Cash 6,250 H. Cash 6,250 Salary expense 6,250 4. A bookkeeper recorded a salary paid by debiting a salary expense of 5,000 and crediting cash of the same amount. What is the adjusting entry if the amount of salary is understated by 1,250? E. Salary expense 1,250 Cash 1,250 F. Cash 1,250 Salary expense 1,240 G. Salary expense 3,750 Cash 3,750 H. Cash 3,750 Salary expense 3,750 5. You recorded the payment of utility expense amounting, PHP1,450 in the general journal twice. Assuming that your entries were: Debit – Utility expense 1,450; Credit – Cash 1,450. What is the adjusting entry? E. Utility expense 1,450 Cash 1,450 F. Cash 1,450 Utility expense 1,440 G. Utility expense 2,880 Cash 2,880 H. Cash 2,880 Utility expense 2,880 6.What kind of entry is use to correct an unrecorded amount at the end of the calendar year? B. Adjusting entry B. Closing entry C. Journal entry D. Reversing entry 7.What kind of entry is use to revert back to the old accounting practice after the preparation of the adjusting entries? A. Adjusting entry B. Closing entry C. Journal entry D. Reversing entry 8.What kind of entry is use to add or deduct the income (loss) to the Owner’s Equity? B. Adjusting entry B. Closing entry C. Journal entry D. Reversing entry 9.Which of the following entry is considered historical in nature? B. Entry made B. Adjusting entry C. Reversing entry D. Should be entry 10.The bookkeeper of ABC Merchandising made this journal entry. Purchases 25,000 Accounts payable 25,000 The amount listed on the voucher was 52,000. What is the adjusting entry? E. Accounts payable 25,000 Purchases 25,000 F. Purchases 25,000 Accounts payable 25,000 G. Accounts payable 27,000 Purchases 27,000 H. Purchases 27,000 Accounts payable 27,000 References Printed Materials: Department of Education. (2016). Fundamentals of Accountancy, Business and Management 1, Teacher’s Guide for Senior High School. Quezon City, Philippines. Websites: https://www.iasplus.com/en/standards/ias/ias8  Answer Key Pre Test Gauge 1. A 1. C 2. D 2. A or B 3. B 3. B 4. A 4. A 5. D 5. B 6. C 6. A 7. A or B 7. D 8. B 8. B 9. A 9. A 10. B 10. D 11. Deepen Books are still open 1. 1.Entry Made: None Should be entry: Depreciation expense 11,250 Accumulated depreciation – delivery truck 11,250 Adjusting entry: Depreciation expense 11,250 Accumulated depreciation – delivery truck 11,250 2.Entry made: None Should be entry: Depreciation expense 20,000 Accumulated depreciation-display cabinet 20,000 Adjusting entry: Depreciation expense 20,000 Accumulated depreciation-display cabinet 20,000 3.Entry made: None Should be entry: Cash in bank 56,000 Sales 56,000 Adjusting entry: Cash in bank 56,000 Sales 56,000 4. Entry made: Salaries and wages 10,000 Cash in bank 10,000 Should be entry: None Adjusting entry: Cash in bank 10,000 Salaries and wages 10,000 5. Entry made: None Should be entry: Notes payable 10,000 Cash in bank 10,000 Adjusting entry: Notes payable 10,000 Cash in bank 10,000  Deepen Books are closed 2. 1.Entry Made: None Should be entry: Jesus Jose Capital 11,250 Accumulated depreciation – delivery truck 11,250 Adjusting entry: Jesus Jose Capital 11,250 Accumulated depreciation – delivery truck 11,250 2.Entry made: None Should be entry: Jesus Jose Capital 20,000 Accumulated depreciation-display cabinet 20,000 Adjusting entry: Jesus Jose Capital 20,000 Accumulated depreciation-display cabinet 20,000 3.Entry made: None Should be entry: Cash in bank 56,000 Jesus Jose Capital 56,000 Adjusting entry: Cash in bank 56,000 Jesus Jose Capital 56,000 4. Entry made: Jesus Jose Capital 10,000 Cash in bank 10,000 Should be entry: None Adjusting entry: Cash in bank 10,000 Jesus Jose Capital 10,000 5. Entry made: None Should be entry: Notes payable 10,000 Cash in bank 10,000 Adjusting entry: Notes payable 10,000 Cash in bank 10,000