Question

Exercise 3-5 Verne Cova Company has the following balances in selected accounts on December 31, 2019. Accounts Receivable Accumulated Depreciation-Equipment 7,000 Equipment Interest Payable Notes Payable 10,000 Prepaid Insurance 2,100 Salaries and Wages Payable Supplies 2,450 Unearned Service Revenue 30,000 All the accounts have normal balances. The information below has been gathered at December 31, 2019. Verne Cova Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2019. 1. A count of supplies on December 31, 2019, indicates that supplies of $900 are on hand. 2. Depreciation on the equipment for 2019 is $1,000. 3. Verne Cova Company paid $2,100 for 12 months of insurance coverage on June 1, 2019. 4. On December 1, 2019, Verne Cova Company collected $30,000 for consulting services to be performed from December 1, 2019, through March 31, 2020. Verne Cova Company performed consulting services for a client in December 2019. The client will be billed $4,200. 5. 6. Verne Cova Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2019. 7. Prepare adjusting entries for the seven items described above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

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