Question

Ket CHAPTER 4: THE ADJUSTING PROCESS RECORD THE FOLLOWING ADJUSTMENTS AS OF JUNE 30, 2012.: A One month of insurance has expired. The initial purchase was for a 12 month policy B. Depreciation expense on the furniture is $50. C. Weekly payroll is $500, June 30, 2012 is a Thursday. D. Interest on the bank loan (rate of 10%) has accrued for one month E. A count of supplies shows $175 on hand at June 30, 2012 F. The retainer covered twelve months worth of service; one month has been delivered G. Work has been completed in an amount of $4,500 DEBIT CREDIT

Answer 1

Adjusting Entries:

	Account title and Explanation	Debit	Credit
A	Insurance expense (3,600/12)	$300
	Prepaid insurance		$300
	[To record insurance expense]
B	Depreciation expense	$50
	Accumulated depreciation-furniture		$50
	[To record depreciation expense]
C	Wages expense	$400
	Wages payable		$400
	[To record wages expense]
D	Interest expense (15,000 x 10% x 1/12)	$125
	Interest payable		$125
	[To record interest expense]
E	Supplies expense [700-175]	$525
	Supplies		$525
	[To record supplies expense]
F	Unearned revenue (18,000/12)	$1,500
	Revenue		$1,500
	[To record revenue from deferred revenue]
G	Accounts receivable	$4,500
	Revenue		$4,500
	[To record accrued revenue]

T-Accounts:

Cash			Notes payable			Common stock
20,000	3,600			15,000			20,000
15,000	2,000
18,000	5,000		Accounts payable			Dividends
	1,000			700		1,500
	1,500
53,000	13,100		Wages payable			Revenue
39,900				Adj. 400			16,000
							Adj. 1,500
Accounts receivable			Interest payable				Adj. 4,500
16,000				Adj. 125
Adj. 4,500						Rent Expense
			Unearned revenue			2,000
Supplies			Adj. 1,500	18,000
700	Adj. 525					Wages expense
						1,000
Office furniture						Adj. 400
5,000
						Insurance expense
Acc. Dep.-Off furn						Adj. 300
	Adj. 50
						Interest expense
						Adj. 125
Prepaid insurance
3,600	Adj. 300					Supplies expense
						Adj. 525
						Depreciation expense
						Adj. 50