Question

The unadjusted trial balance of Sketch Star Makers Inc., prepared as of December 31, 2018, includes the following account balances. All of the accounts listed have normal balances. $ Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation Notes Payable (long-term) Deferred Revenue Service Revenue Salaries and Wages Expense 10,500 2,100 1.200 5,000 11,000 2,100 21,000 5,500 31,000 30,500 The following information is also available: A) A count of supplies revealed $500 worth on hand at December 31, 2018. B) An insurance policy, purchased on January 1, 2018, Covers five years. C) The equipment depreciates at a rate of $1,100 per year; no depreciation has been recorded for 2018. D) One half (or 50%) of the amount recorded as Deferred Revenue remains deferred as of December 31, 2018. E) The accrued amount of salaries and wages at December 31, 2018 is $2,100. Required: Prepare the required adjustments for the company as of December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Credit Debit $ 700 Transaction General Journal Supplies expense ($1,200-$500) Supplies (To record the supplies expense) $ 700 $ 1,000 Insurance expense ($5,000/5) Prepaid insurance (To record the insurance expense) $ 1,000 $ 1,100 Depreciation expense Accumulated depreciation (To record the depreciation expense) $ 1,100 $ 2,750 Deferred Revenue ($5,500*50%) Service Revenue (To record the service revnue earned) $ 2,750 $ 2,100 Salaries and Wages expense Salaries and Wages Payable (To record the accrued salaries and wages) $ 2,100