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A. Wages of $7,000 are earned by workers but not paid as of December 31.B. Depreciation on the company’s equipment for the year is $11,920.C. The Office Supplies account had a $450 debit balance at the beginning of the year. During the year, $5,697 of office supplies are purchased. A physical count of supplies at December 31 shows $620 of supplies available.D. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $3,500 of unexpired insurance benefits remain at December 31.E. The company has earned (but not recorded) $550 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10.F. The company has a bank loan and has incurred (but not recorded) interest expense of $4,500 for the year ended December 31. The company will pay the interest five days after the year-end on January 5.For each of the above separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31.

Sagot :

abiolataiwo2015

The adjusting entries required of financial statements for the year ended (date of) December 31 are :

a. Dr Wages expense $7,000

Cr  Wages payable  $7,000

( To record Wages expense)

b. Dr Depreciation expense $11,920

Cr Accumulated depreciation - Equipment  $11,920

( To record Depreciation expense)  

c. Dr Supplies expense $5,527

Cr Supplies  $5,527

( To record supplies expense)  

d. Dr Insurance expense $1,500

Cr Prepaid insurance  $1,500

( To record insurance expense)

e. Dr Interest receivable $550

Cr Interest revenue  $550

( To record interest revenue)  

f. Dr Interest expense $4,500

Cr Interest payable  $4,500

( To record interest expense)

Supplies expense=$450+$5,697-$620

Supplies expense= $5,527

Insurance expense=$ 5,000-$3,500

Insurance expense= $1,500

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