Question

Prepare general journal entries on December 31 to record the following unrelated year-end adjustments.

a. Estimated depreciation on office equipment for the year, SAR 2,000

b. The Prepaid Insurance account has a SAR 2,500 debit balance before adjustment. An examination of insurance policies shows SAR 350 of insurance expired

c. The Prepaid Insurance account has a SAR 1,400 debit balance before adjustment. An examination of insurance policies shows SAR 400 of unexpired insurance

d. The company has three office employees who each earn SAR200 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26 and have worked full days on Monday, Tuesday and Wednesday, December 29, 30 and 31.

Answer 1

(a) 350 Date General Journal Debit credit Dec 31 Depreciation on office Equipment SAR 2000 I Accumulated Depreciation on office SAR 2000 Equipment b. Dec.31 Insurance Expense - Prepaid ensurance 350 - C. Dec.31 clnsurance Expense - Prepaid Insurance (SAR 1400 - SAR 400 = SAR 1000) 1. Dec.31 office Salaries Expense 1800 office Salaried Payable 11800 ( 3 Employus x 3 days XSAR200 / day I employal = SAR 1800) looo 1000