Question

For each of the following, journalize the necessary adjusting entry:

(a) A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that

(1) The fiscal period ends on Tuesday.

(2) Assume the same facts except that the fiscal period ends on Wednesday.

(b) The balance in the prepaid insurance account before adjustment at the end of the year is $18,000. Journalize the adjusting entry required under each of the following alternatives:

(1) The amount of insurance expired during the year is $5,300.

(2) Assume the same facts except that the amount of unexpired insurance applicable to a future period is $2,700.

(c) On July 1 of the current year, a business pays $54,000 to the city for license taxes for the coming fiscal year. The same business is also required to pay an annual property tax at the end of the year. The estimated amount of the current year's property tax allocated to July is $4,800.

(1) Journalize the two adjusting entries required to bring the accounts affected by the taxes up to date as of July 31.

License
Property Tax

(2) What is the amount of tax expense for July?
$

(d) The estimated depreciation on equipment for the year is $32,000.

Answer 1

Answer :

(a)
(1)	Salaries Expenses	$8,800
	Accrued salaries		$8,800
(2)	Salaries Expenses	$13,200
	Accrued salaries		$13,200
(b)
(1)	Insurance Expenses	$5,300
	Pre-paid Insurance		$5,300
(2)	Insurance Expenses	$15,300
	Pre-[aid insurance ($18,000 - $2,700)		$15,300
(c)
(1)	License
	Pre-paid license taxes	$54,000
	License taxes		$54,000
	Property Tax
	Property Tax	$4,800
	Property tax payable		$4,800
(2)	Amount of tax expenses for july is $4,800
(d)	Depreciation Expenses	$32,000
	Accumulated Depreciation - Equipments		$32,000

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