Question

quantum inc prepare

ACCT 201 Chapter Practice Problems 1. Quantum in prepares monthly financial statements t trial balance includes the following account information hat Thember e d November 30 Debit Credit Supplies $3,000 Prepaid Insurance 5,000 Salaries Payable Deferred Revenue 3,000 The following information is known for the month of December 1. Purchases of supplies during December total $5.000. Supplies on hand at the end of December equal $4,500 2. Prepaid Insurance needs to be adjusted for December. Insurance cost is $2,500 per month. 3. Salaries for December are owed at the end of the vear are $17,000, but will not be paie until January 5th. 4. On November 1, a tenant pays Quantum $4.500 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amour Required: Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable and deferred revenue on December 31. Date Account Debit Credit 30 Suppris

Answer 1

	Quantum Inc
	Date	Account	Debit	Credit		Calculation
	31-Dec	Supplies expense	3,500			=3,000+5,000-4,500
		Supplies		3,500
	31-Dec	Insurance expense	2,500
		Prepaid Insurance		2,500
	31-Dec	Salaries expense	17,000
		Salaries payable		17,000
	31-Dec	Deferred Revenue	1,500			=4,500/3
		Rent Revenue		1,500

	Total Sports Inc.
1		Depreciation expense per year	(Cost-Salvage Value) / Useful Life
			=(5,980,000-400,000)/12
		Depreciation expense per year	465,000
2		Depreciation expense per month	38,750			=465,000/12 years
3	Date	Account	Debit	Credit		Calculation
	31-Dec-15	Depreciation expense	271,250			=38,750*7 months
		Accumulated Depreciation - Building		271,250		June to Dec is 7 months
4	31-Dec-16	Depreciation expense	465,000
		Accumulated Depreciation - Building		465,000
5		Accumulated Depreciation after 3 years
	31-Dec-15	Depreciation expense	271,250
	31-Dec-16	Depreciation expense	465,000
	31-Dec-17	Depreciation expense	465,000
	31-Dec-17	Accumulated Depreciation after 3 years	1,201,250
6		Book Value after 3 years
		Building	5,980,000
	Less	Accumulated Depreciation - Building	(1,201,250)
	31-Dec-17	Book Value after 3 years	4,778,750