Merchandise Inventory , before adjustment, has a balance of $8,300. The newly co
ID: 2519900 • Letter: M
Question
Merchandise Inventory, before adjustment, has a balance of $8,300. The newly counted inventory balance is $8,800.
Unearned Seminar Fees has a balance of $6,800, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019.
Prepaid Insurance has a balance of $16,800 for six months’ insurance paid in advance on May 1, 2019.
Store equipment costing $11,380 was purchased on March 31, 2019. It has a salvage value of $580 and a useful life of four years.
Employees have earned $330 that has not been paid at June 30, 2019.
The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $9.90; FUTA, $1.98; Medicare, $4.79; and social security, $20.46.
Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were $2,800,000.
Prepaid Rent has a balance of $7,800 for six months’ rent paid in advance on March 1, 2019.
The Supplies account in the general ledger has a balance of $480. A count of supplies on hand at June 30, 2019, indicated $190 of supplies remain.
The company borrowed $8,200 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 6 percent.
Required:
Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end.
Analyze:
After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?
Explanation / Answer
2. Balance of Prepaid Rent A/c
Paid on 1 march 7800
Less recognised as exp in march 1300
Less recognised as expfrom april to june 3900
Balance as on 30 june 2600
1 Inventory 500 to Cost of goods sold 500 2 Unearned seminor Fee 2720 (6800/5*2) to Revenue 2720 3 Prepaid insurance 5600 (16800/6*2) to Insurance exp 5600 4 Depreciation 675 (11380-580)/4*3/12 to Store Equipment 675 5 Salary exp 330 to Salary Payable 330 6 SUTA 9.9 FUTA 1.98 Medicare tax 4.79 Social security tax 20.46 to tax Payable 37.13 7 Prov for bad debts 7000 (2800000*1%*3/12) to allowance for receivables 7000 8 Prepaid Rent 3900 (7800/6*3) to Rent exp 3900 9 Supplies expenses 290 to Supplies 290 (480-190) 10 cash a/c 8200 to Note Payable 8200 11 Interest a/c 41 (8200*6%/12*1) to Interest payable 41