Question

Journalized the adjusting entries required on the following independent situation.

a. The balance in the supplies account before adjustment at the end of the year is $2,750. Supplies on hand at the end of the year is $530.

b. For every purchase of supplies the company debit the account Supplies expense. At the end of the year, remaining supplies unused amounted to $750.

c. Prepaid insurance has a debit balance of $6,500 at the beginning of the year. Expired insurance amounted to $3,250.

d. The balance of uneamed fees account before adjustment at the end of the year is $25,800. Unearned fees at the end of the year is $12,000.

e. Weekly salaries of $15,000 are paid every Friday for 5 days work. The period ends on Tuesday.

f. At the end of the year, $10,500 of fees have been eamed but have not been billed to clients.

g. The equipment had been purchased on September 1, 2020 amounting to $300,000. It was estimated that the equipment has a useful life of 5 year with no residual value. Use straight-line method.

Answer 1

Transaction	Accounts and Explanation	Debit	Credit
a.	Supplies Expense	$2,220		($2,750 - $530)
	Supplies		$2,220
b.	Supplies	$750
	Supplies Expense		$750
c.	Insurance Expense	$3,250
	Prepaid Insurance		$3,250
d.	Unearned fees	$13,800		($25,800 - $12,000)
	Fees Earned		$13,800
e.	Salaries Expense	$6,000		($15,000 x 2/5)
	Salaries Payable		$6,000
f.	Accounts Receivable	$10,500
	Fees Earned		$10,500
g.	Depreciation Expense	$20,000
	Accumulated Depreciation		$20,000
	($300,000/5 years x 4/12)