Question

In addition to those accounts listed on the trial balance, the chart of accounts for Cullumber Company also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Prepaid insurance is a 1-year policy starting May 1, 2020. 2. A count of supplies shows $700 of unused supplies on May 31. 3. Annual depreciation is $2,940 on the buildings and $1,440 on equipment. 4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.) 5. Two-thirds of the unearned rent revenue has been earned. 6. Salaries of $700 are accrued and unpaid at May 31.
Problem 3-02A a-c, d1-d3 (Video) (Part Level Submission) The Cullumber Company opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. Cullumber Company Trial Balance May 31, 2020 Credit Account Number 101 126 130 Debit $ 3,400 2,000 1,800 12,000 58,800 14,400 Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Unearned Rent Revenue Mortgage Payable Common Stock Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense $ 11,000 3,000 40,000 35,000 8,000 429 610 732 550 3,200 850 $97,000 $97,000 In addition to those accounts listed on the trial balance, the chart of accounts for Cullumber Company also contains the following accounts and account numbers: No. 142 Accumulated Depreciation-Buildings, No. 150 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. 2. 3. 4. 5. 6. Prepaid insurance is a 1-year policy starting May 1, 2020. A count of supplies shows $700 of unused supplies on May 31. Annual depreciation is $2,940 on the buildings and $1,440 on equipment. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.) Two-thirds of the unearned rent revenue has been earned. Salaries of $700 are accrued and unpaid at May 31.

Answer 1

Solution:

н 47 Credit 49 Date 50 1) 51 Adjusting Journal Entries Particulars Prepaid Insurance Dr ($1800*1 month/12 months) To Insurance Expenses Debit $150 | $150 52 2) $1,300 Supplies expense Dr ($2000-$700) To Supplies 53 54 55 56 $1,300 3) $365 Depreciation expense Dr (2940+1440)*1/12] To Accumulated Depreciation $365 58 4) $400 59 60 61 Interest expense Dr ($40000*12%*1/12) To Interest Payable $400 5) $2,000 Unearned Rent Revenue Dr ($3000*2/3) To Rent Revenue $2,000 64 3) $700 Salaries and wages Expense Dr To Salaries and wages Payable $700 65 66 67 68 69 70 71 72 73 74 75 76 78 80 82 83 84 85 86 87 88 89 Sheet4 Sheet240 Sheet6 Sheet 7