Question

Required Each of the following independent events requires a year-end adjusting entry. Show how each event and its related adjusting entry affect the accounting equation. Assume a December 31 closing date. The first event is recorded as an example. (Do not round intermediate calculations & Round your final answer to nearest whole dollar.) a. Paid $6,200 cash in advance on October 1 for a one-year insurance policy. b. Received an $5,000 cash advance for a contract to provide services in the future. The contract required a one-year commitment, starting April 1. c. Purchased $1,900 of supplies on account. At year's end, $245 of supplies remained on hand. d. Paid $11,280 cash in advance on August 1 for a one-year lease on office space. Event/ Adjustment Stockholders' Equity Common Retained Stock Earnings a. a. Adj. + + (1,550) The Accounting Equation Total Assets Liabilities Cash Other + Assets (6,200) + 6,200 = (1,550) = 500,000 500,000 375,000/= (1,900) + 1 190,000 = (165,500) = (1,128,000) + 1,128,000 = (470,000) = + + + b. Adj. + 375,000 + c. Adj. + + (165,500) + d. Adj. + (470,000)

Answer 1

Event/ Adjustment	Total Assets				Liabilities		Stockholders' Equity
	Cash	+	Other Assets	=		+	Common Stock	+	Retained Earning
a.	($6,200)	+	$6,200	=		+		+
a. adj.		+	($1,550)	=		+		+	($1,550)
b.	$5,000	+		=	$5,000	+		+
b. adj.		+		=	($3,750)	+		+	$3,750
c.		+	$1,900	=	$1,900	+		+
c. adj.		+	($1,655)	=		+		+	($1,655)
d.	($11,280)	+	$11,280	=		+		+
d. adj.		+	($4,700)	=		+		+	($4,700)