Question

The unadjusted trial balance of Copper’s Hire Cars is shown below (ignore GST).

Copper’s Hire Cars
Unadjusted Trial Balance
As at 30 June 2019
Account	Debit	Credit
Cash at bank	$ 8,140
Accounts receivable	12,860
Office supplies	640
Prepaid insurance	2,700
Hire cars	93,600
Accumulated depreciation - hire cars		$ 39,400
Accounts payable		10,800
Unearned hire fees		2,260
H. S. Capital		68,340
H. S. Drawings	20,600
Hire fees revenue		98,700
Insurance expense	8,180
Wages expense	50,620
Advertising expense	3,880
Maintenance expense	7,600
Fuel and oil expense	10,680
Total	219,500	219,500

  Additional information:

1. Petrol of $580 used during the last week in June has not been paid for or recorded.
2. A physical count showed office supplies totalling $240 are still on hand at 30 June.
3. The $2700 prepaid insurance that covers the next 9 months (starting from 1 June) was purchased on 1 June.
4. For the $2260 Unearned Hire Fees, 1200 has been earned in June.
5. The monthly depreciation for Hire cars is $2000.

  
Required:
Prepare end of month adjusting entries for the entity. Ignore narration.

You may wish to copy the following table for your answer.

Date		Accounts	Debit	Credit

  

Answer 1

The adjusting entries are prepared as follows:

Date	Account	Debit	Credit
30-Jun	Fuel and Oil Expense	$580
	Fuel and Oil Payable		$580
30-Jun	Office Supplies Expense (640 - 240)	$400
	Office Supplies		$400
30-Jun	Insurance Expense (2,700*1/9)	$300
	Prepaid Insurance		$300
30-Jun	Unearned Hire Fees	$1,200
	Unearned Hire Revenue		$1,200
30-Jun	Depreciation Expense - Hire Cars	$2,000
	Accumulated Depreciation - Hire Cars		$2,000