Question

a.-b. Merchandise Inventory, before adjustment, has a balance of $7,600. The newly counted inventory balance is $8,100.

3. Unearned Seminar Fees has a balance of $6,100, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019.
4. Prepaid Insurance has a balance of $12,600 for six months’ insurance paid in advance on May 1, 2019.
5. Store equipment costing $4,350 was purchased on March 31, 2019. It has a salvage value of $510 and a useful life of four years.
6. Employees have earned $260 that has not been paid at June 30, 2019.
7. The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $7.80; FUTA, $1.56; Medicare, $3.77; and social security, $16.12.
8. Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were $2,100,000.
9. Prepaid Rent has a balance of $6,750 for six months’ rent paid in advance on March 1, 2019.
10. The Supplies account in the general ledger has a balance of $410. A count of supplies on hand at June 30, 2019, indicated $155 of supplies remain.
11. The company borrowed $6,500 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 12 percent.

Required:
Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end.

Analyze:
After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?

Answer 1

a)inventory adjsutment=merchandinse inventory before-actual inventory
=7600-8100=-500
Merchandise inventory(db)500
cost of goods sold(cr) 500

b)Unearned seminar fee(db) 6100*(2/5)=2440
Seminar fee earned(cr)2440

c)2 months passed
insurance expense(db)12600*(2/6)=4200
prepaid insurance(cr)4200

d)depreciation=(cost-salvage)/months
=(4350-510)/(4*12)=80
depreciaiton expense(db)80
Accumulated depreciation(cr)80

e)salaries expense(db)260
salaries payable(CR)260

f)taxes expense(db)=7.8+1.56+3.77+16.12=29.25
taxes payable(Cr) 29.25

g)allowance for uncollectible accounts(db) 1%*2100000=21000
account receivable(Cr)21000

h)rent expense(db) 6750*(4/6)=4500
prepaid rent(Cr)4500

i)supples expense(db) 410-155=255
supplies(cr)255

j)interest expense(db) 6500*(1/12)*12%=65
interest payable(Cr)65

2) prepaid rent 6750-4500=2250