Prepare adjusting journal entries for the year ended (date of) December 31, 2017
ID: 2334153 • Letter: P
Question
Prepare adjusting journal entries for the year ended (date of) December 31, 2017, for each of these separate situations.
Depreciation on the company's equipment for 2017 is computed to be $14,000.
The Prepaid Insurance account had a $8,000 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $1,580 of unexpired insurance coverage remains.
The Office Supplies account had a $590 debit balance on December 31, 2016; and $2,680 of office supplies were purchased during the year. The December 31, 2017, physical count showed $696 of supplies available.
Three-fourths of the work related to $13,000 of cash received in advance was performed this period.
The Prepaid Insurance account had a $5,200 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of insurance policies showed that $3,620 of coverage had expired.
Wage expenses of $2,000 have been incurred but are not paid as of December 31, 2017.
Explanation / Answer
Adjusting entry :
Date account and explanation debit credit Dec 31 Depreciation expense 14000 Accumlated depreciation 14000 (To record depreciation expense) Dec 31 Insurance expense (8000-1580) 6420 Prepaid insurance 6420 (To record insurance expense) Dec 31 Supplies expense (590+2680-696) 2574 Supplies 2574 (To record supplies expense) Dec 31 Unearned revenue (13000*3/4) 9750 Revenue earned 9750 (To record revenue) Dec 31 Insurance expense 3620 Prepaid insurance 3620 (To record insurance expense) Dec 31 Wages expense 2000 Wages payable 2000 (To record wages payable)