Question

2. Compute the following adjustme pute the following adjustments and record in the attached General Journal: b. a. ROBO Company ROBO Company pays its employees every Friday. On Friday, January 4, 2013, the Company paid $3,500 for the 5 days beginning the previous December 31. Prepare the adjusting entry on December 31. (Hint: Calculate the payroll for December 31, 2012.) The unearned revenue account shows a balance of $46,000. According to the manager, 60% of that amount has been earned. C. At the end of the month, $5,700 of services have been performed but not yet billed. d. The balance for Prepaid Insurance is $6,600 prior to the year-end adjustment, the unexpired balance is $2,400. e. The balance for Supplies is $1,200 prior to the year-end adjustment, the year-end inventory balance is $400. 3. Adjustment for depreciation. The estimated amount of depreciation on equipment for the current year is $10,650. Journalize the adjusting entry to record the depreciation. 4. The following accounts were taken from the Adjusted Trial Balance columns of the end-of- period spreadsheet for April 30, for Finnegan Co.: Accumulated Depreciation Fees Earned Depreciation Expense Rent Expense Prepaid Insurance Supplies Supplies Expense $32,000 78,000 7,250 34,000 6,000 400 1,800 Prepare an income statement.

Answer 1

Solution:

Requirement 2:

Event	Account Titles and Explanation	Debit	Credit
a	Wages Expense (3,500 /5 days)	$                700
	Wages Payable		$             700
	(Being wages payable recorded)
b	Unearned Revenue (46000*60%)	$          27,600
	Service/Sale Revenue		$       27,600
	(Being revenue earned)
c	Accounts Receivables	$            5,700
	Service/Sale Revenue		$         5,700
	(Being revenue earned)
d	Insurance Expense (6600-2400)	$            4,200
	Prepaid Insurance		$         4,200
	(Being insurance expense recorded)
e	Supplies Expense(1200-400)	$                800
	Supplies		$             800
	(Being supplies expense)

Requirement 3:

Event	Account Titles and Explanation	Debit	Credit
a	Depreciation Expense	$          10,650
	Accumulated Depreciation- Equipment		$       10,650
	(Being depreciation expense)

Requirement 4:

Finnegan Co.
Income statement
For period ended April 30.
Revenue
Fee Earned		$      78,000
Total Revenue (A)		$      78,000
Operating Expenses / Expenses
Depreciation Expense	$             7,250
Rent Expense	$           34,000
Supplies Expense	$             1,800
Total Operating Expense (B)		$      43,050
Net Income (A-B)		$      34,950

Notes:

1) Under Requirement 4, Income statement does not includes accumulated depreciation, supplies and prepaid insurance because there are balance sheet items.