Question

3 a. b. Merchandise Inventory, before adjustment, has a balance of $7,400. The newly counted inventory balance is $7.900. c. Unearned Seminar Fees has a balance of $5,900, 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 d. Prepaid Insurance has a balance of $11.400 for six months' insurance paid in advance on May 1, 2019. e. Store equipment costing $13,450 was purchased on March 31, 2019. It has a salvage value of $490 and a useful life of six years. f. Employees have earned $240 that has not been paid at June 30, 2019. g. The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $7.20, FUTA, $1.44; Medicare, $3.48; and social security. $14.88 h. Management estimates uncollectible accounts expense at 1 percent of sales. This year's sales were $1.900.000 1. Prepaid Rent has a balance of $6,450 for six months' rent paid in advance on March 1, 2019. J. The Supplies account in the general ledger has a balance of $390. A count of supplies on hand at June 30, 2019, indicated $14 of supplies remain. k. The company borrowed $8,800 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? < Prev 4 of 4 News earch o 9 e

Answer 1

Adjusting Entries: CREDIT EVENT a) & b) DEBIT $500 ($ 7,900 - $7,400 --> Inventory balance shall be increased] $500 $2,360 [$5,900 x (2/5) --> 2 out of 5 seminars' fee were earned] $2,360 $3,800 ($11,400 x (2/6) --> 2 out of 6 months' insurance expired] $3,800 $540 DATE ACCOUNT TITLES Jun. 30 Merchandise Inventory Cost of Goods Sold Jun. 30 Unearned Seminar Fee Seminar Fees Earned Jun. 30 Insurance Expense Prepaid Insurance Jun. 30 Depreciation Expense - Store Equipment Accumulative Depreciation - Store Equipment Jun. 30 Salaries Expense Salaries Payable Jun. 30 Payroll Tax Expense SUTA Taxes Payable FUTA Taxes Payable Medicare Tax Payable Social Security Taxes Payable [(($13,450 - $490) / 6 years) < (3/12)] --> 3 months' insurance is recognized from Apr 1 thru Jun 30 $540 $240 $240 $27.00 $7.20 $1.44 $3.48 $14.88

Jun. 30 $19,000 [$1,900,000 x 1% --> 1% of sales] $19,000 Jun. 30 $4,300 ($6,450 < (4/6) --> 4 out of 6 months' prepaid rent expired] $4,300 Bad Debt Expense Allowance for Doubtful Accounts Rent Expense Prepaid Rent Supplies Expense Supplies Interest Expense Interest Payable Jun. 30 $245 [$390 - $145] $245 Jun. 30 $88 [$8,800 x 6% x (1/6) --> 1 month's interest expense is accrued] $88 After recording all adjustments against Prepaid Rent: Prepaid Rent (T-Account) $6,450 $4,300 Adj. Entry (i) Beg. Bal. Prepaid Rent, beginning balance Less: Prepaid rent expired Prepaid Rent, ending balance $6,450 $4,300 [Ref: Entry # (0)] $2,150 End. Bal. $2,150