Pk 3-11 Presented below is information related to Susan Mayer, Realtor, at the e
ID: 2604365 • Letter: P
Question
Pk 3-11 Presented below is information related to Susan Mayer, Realtor, at the end of the fiscal year ending December 3 1 . 1. Susan had paid the local newspaper $335 for an advertisement to be run In January of the next year, charging it to Advertising Expense. 2. On November l Susan borrowed $9,000 frorm HSBC issuing a 90-day 10% note. Salaries and wages due and unpaid December 3 1 : sales $1.420; office clerks, S 1,060. 3. 4. Interest accrued to date on Mike Delfino's note which Susan holds, $500. . Estimated loss on bad debts, $1,210 for the period. 6. Stamps and stationery on hand, $110, charged to Stationery and Postage Expense account when purchased 7. Susan has not yet paid the December rent on the building her business occupies $1,000. 8. Insurance paid November 1, for one year, $930, charged to Prepaid Insurance when paid. 9. Property taxes accrued $1,670. 0 On December i susan gave Bree her (Susan's) 60-day, 12% note for S6,000 on account. 11. On October 31 Susan received $2,580 from Carlos Solis in payment of 6 months rent for office space occupied by him in the building and credited Unearned Rent Revenue 12. On September 1 she paid 6 months' rent in advance on a warehouse, S6.600 and debited the account Prepaid Rent. 13. The bill from the Gerbil Power Company for December has been received but not yet entered or paid, $510. 14. Estimated depreciation on furniture and equipment, $1,400. Instructions Prepare all necessary annual adjusting & reversing entries for the year ended December 31 .Explanation / Answer
SOLUTION:
Debit Credit 1 Prepaid Advertising 335 Advertising Expense 335 2 Interest Expense 610 Interest Payable 610 (9000*10%*61/90days) 3 Salaries and Wages Expense 2,480 Salaries and Wages Payable 2,480 (1,420 + 1,060) 4 Interest Receivable 500 Interest Income 500 5 Bad Debt Expense 1,210 Allowance for Doubtful Accounts 1,210 6 Supplies 110 Office Expense 110 7 Rent Expense 1,000 Rent Payable 1,000 8 Insurance Expense 155 Prepaid Insurance 155 (930*2/12) 9 Property Tax Expense 1,670 Property Tax Payable 1,670 10 Interest Receivable 60 Interest Income 60 11 Unearned Rent Revenue 860 Rent Revenue 860 (2580 * 2/6 months) 12 Rent Expense 2,200 Prepaid Rent 2,200 (6,600*4/12 months) 13 Utilities Expense 510 Accounts Payable 510 14 Depreciation Expense 1,410 Accumulated Depreciation - Equipment 1,410