Question

1. Schramel Advertising Company’s trial balance at December 31 shows Supplies $6,700 and Supplies Expense $0. On December 31, there are $2,100 of supplies on hand. Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the accounts, post the adjusting entry, and indicate the adjusted balance in each account. Prepare adjusting entry for supplies.

2. At the end of its first year, the trial balance of Wolowitz Company shows Equipment $30,000 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,750. Prepare the annual adjusting entry for depreciation at December 31, post the adjustments to T-accounts, and indicate the balance sheet presentation of the equipment at December 31. Prepare adjusting entry for depreciation.

Answer 1

Date	Description/Account	Debit	Credit		Supplies
Dec 31	Supplies Expense	$4,600				$6,700	12/31	$4,600
	Supplies		$4,600
	($6,700 - $2,100)				12/31 Bal.	$2,100
					Supplies Expense
					12/31	$4,600
Date	Description/Account	Debit	Credit		Accumulated Depreciation - Equip.
Dec 31	Depreciation Expense	$3,750						$0
	Accumulated Depreciation		$3,750				12/31	$3,750
							12/31 Bal.	$3,750
					Depreciation Expense
	Balance Sheet (Partial)				12/31	$3,750
	Equipment	$30,000
	Less: Accumulated Depreciation	$3,750
			$26,250