Question

ACCT 101a Chapter 3 - Adjusting entries In the General Journal, record adjusting journal entries for the following items for Sunny Inc. at December 31, 2018. 1. On January 2, 2018 Sunny Inc. accepted a $17,500 deposit from a client for design work to be completed during the year. On December 31, 2018 all the design work for the client is complete. 2. On December 31, 2018 the bill for gas was received but not yet paid. Amount is $375. 3. On September 1, 2018, a $58,000 truck was purchased on account. The truck is expected to last 6 years and have a residual value of $4,500 at the end of its useful life. 4. Design services performed during December, but the client has not yet billed totalled $8,900. 5. On June 1, 2018, $4,200 of supplies were purchased and recorded as an asset. A count revealed $1,200 still on hand at December 31, 2018. General Journal Credit Account Titles and Explanation Date

Answer 1

Journal

Date	Account title	Debit	Credit
Dec. 31, 2018	Unearned service revenue	17,500
	Service revenue		17,500
	(To record service revenue earned)
Dec. 31, 2018	Utilities expense	375
	(Utilities payable)		375
	(To record utilities expense)
Dec. 31, 2018	Depreciation expense	2,972
	Accumulated Depreciation - Equipment		2,972
	(To record Depreciation expense)
Dec. 31, 2018	Accounts receivable	8,900
	Service revenue		8,900
	(To record service revenue earned)
Dec. 31, 2018	Supplies expense	3,000
	Supplies		3,000
	(To record supplies expense)

Annual depreciation on truck = (Cost of truck - Residual value)/Useful life

= (58,000 - 4,500)/6

= $8,917

Depreciation expense for 4 months of year 2018 = 8,917 x 4/12

= $2,972

Supplies expense = Supplies purchased - Ending supplies

= 4,200 - 1,200

= $3,000

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