Question

The unadjusted trial balance of Sketch Star Makers Inc., prepared as of December 31, 2015, includes the following account balances. All of the accounts listed have normal balances.

Cash	$	13,000
Accounts Receivable		2,600
Supplies		2,200
Prepaid Insurance		6,000
Equipment		16,000
Accumulated Depreciation––Equipment		2,600
Notes Payable (long-term)		26,000
Unearned Revenue		8,000
Service Revenue		36,000
Salaries and Wages Expense		33,000

The following information is also available:

A)	Account of supplies revealed $1,000 worth on hand at December 31, 2015.
B)	An insurance policy, purchased on January 1, 2015, covers four years.
C)	The equipment depreciates at a rate of $1,600 per year; no depreciation has been recorded for 2015.
D)	Half (or 50%) of the amount recorded as Unearned Revenue remains unearned as of December 31, 2015
E)	The accrued amount of salaries and wages at December 31, 2015 are $2,600.

Required:

Prepare the required adjustments for the company as of December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Required adjustments for the company as of December 31, 2015 is as prepared below:

Date	Particulars	L.F	Amount ($)	Amount ($)
A	Supplies Expense (2,200-1,000)		1,200
	Supplies
	(for supplies expensed)
B	Insurance Expense (6,000*12/48)		1,500
	Prepaid Insurance			1,500
	(for insurance for 2015 expensed)
C	Depreciation expense		1,600
	Accumulated dep- equipment			1,600
	(Foe equipment depreciated)
D	Unearned Revenue (8,000*.5)		4,000
	Service Revenue			4,000
	(For revenue earned)
E	Salaries and wages expense		2,600
	Salaries and Wages payable			2,600
	(For salaries and wages accrued)