Question

Alpha Dog formed a corporation on January 1, 2016 to provide construction services in the town of Elven, Rivendell, ME. The following is the December 31th Unadjusted Trial Balance.

Alpha Dog Corporation
Unadjusted Trial Balance
12/31/16
Accounts	Debit	Credit
Cash	$532,000
Accounts Receivable	172,000
Supplies	85,000
Prepaid Insurance	36,000
Equipment	2,400,000
Accounts Payable		$32,000
Unearned Revenue		100,000
Note Payable (Long Term)		1,420,000
Capital Stock		1,075,000
Revenues		1,397,000
Wages Expense	497,000
Fuel Expense	62,000
Rent Expense	180,000
Interest Expense	60,000	________
Totals	$4,024,000	$4,024,000

The following information is provided regarding end of the FY required adjusting entries. Also assume that no monthly adjusting entries were done.

Instructions:

Prepare in journal form, all adjusting entries on 12/31/16 based on the additional information below. There may be more rows than needed so as to have spacing between each adjusting entry.

1. Equipment was purchased on January 1 for 2,400,000, has an estimated life or 5 years with an estimated salvage value of $200,000. Alpha Dog used the double declining balance method for depreciation. Compute the Depreciation expense on 12/31/16.

2. Supplies on hand at year end are $20,000.

3. The insurance policy is for 12 months and was purchased on March 1.

4. Services performed and were unrecorded were for $25,000.

Answer 1

Date	General Journal	Debit	Credit
Dec.31, 2016	Depreciation Expense	880,000.00
	Accumulated Depreciation		880,000.00
	(Depreciation on equipment)
Dec.31, 2016	Supplies Expense	65,000.00
	Supplies		65,000.00
	(Consumption of supplies)
Dec. 31, 2016	Insurance Expense	30,000.00
	Prepaid Insurance		$30,000
	(Expired insurance)
Dec.31, 2016	Accrued Revenue Receipt	25,000.00
	Revenue Receipt		$35,000
	(Accrued unbilled services)