Question

E3-23 (similar to) Question Help Consider the following situations for Takoma Park Welding Services: (Click the icon to view the situations.) Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) a. Depreciation for the current year includes Equipment, $2,500. 0 More Info Date Accounts and Explanation Debit Credit (a) Dec. 31 a. Depreciation for the current year includes equipment, $2,500. b. Each Monday, Takoma Park pays employees for the previous week's work. The amount of weekly payroll is $7,000 for a seven-day workweek (Monday to Sunday). This year, December 31 falls on Thursday. c. The beginning balance of Office Supplies was $2,400. During the year, Takoma Park purchased office supplies for $3,300, and at December 31 the office supplies on hand totaled $1,200. d. Takoma Park prepaid a two full years' insurance on July 1 of the current year, $6,960. Record insurance expense for the year ended December 31. e. Takoma Park had earned $2,800 of unearned revenue. f. Takoma Park had incurred (but not recorded) $180 of interest expense on a note payable. The interest will not be paid until February 28. g. Takoma Park billed customers $5,500 for welding services performed. Print Done

Answer 1

Solution:

Adjusting Entries:

Date	Account Titles and Explanation	Debit	Credit
(a) Dec. 31	Depreciation Expense	$             2,500
	Accumulated Depreciation- Equipment		$          2,500
	(Being depreciation expense)
(b) Dec. 31	Wages Expense [ ($7000 / 7 days) * 4 days ]	$             4,000
	Wages Payable		$          4,000
	(Being wages payable recorded)
(c) Dec. 31	Supplies Expense (2400+3300-1200)	$             4,500
	Supplies		$          4,500
	(Being supplies expense)
(d) Dec. 31	Insurance Expense [ $6960 / 24 Months*6 Months]	$             1,740
	Prepaid Insurance		$          1,740
	(Being insurance expense recorded)
(e) Dec. 31	Unearned revenue	$             2,800
	Service Revenue		$          2,800
	(Being service revenue recorded)
(f) Dec. 31	Interest Expense	$                180
	Interest Payable		$             180
	(Being interest expense recorded)
(g) Dec. 31	Accounts Receivable	$             5,500
	Service Revenue		$          5,500
	(Being service revenue recorded)