Question

All of the transactions of Harding Trading Co. for the year have been journalized and posted. The following information has been gathered for the adjustment process as of December 31, 2018: A. The Supplies account shows a balance of $950. A count of supplies revealed $480 on hand, B. The $1,560 premium relating to a one-year insurance policy was paid on December 1, 2018 C. The company's equipment, which was purchased last year, depreciates at a rate of $1,200 per year. D. On September 30, 2018, a customer paid $9,800 in advance for services; as of December 31, 2018, services in the amount of $2,940 had been performed for this customer. E. Employees are paid $2,800 on Fridays for the 5-day workweek, which ends on that Friday. However, December 31, 2018 falls on a Thursday F. The company has completed $410 of work for customers, the customers have not yet been billed and the related revenue has not been recorded Required: a. Prepare the required adjusting entries required at December 31, 2018 b. For each of the adjusting items, indicate the amount and the direction of effects of the adjusting journal entry on the elements of the balance sheet and income statement. Complete the following table by entering the amount and the direction (+ for increase. - for decrease) or leave blank for no effect. Complete this question by entering your answers in the tabs below. Required A Required B

Answer 1

Harding Trading Co. Requirement A Requirement B Adjusting Enteries Trans. Particulars A. Supplies Expense Supplies (Supplies used) 950 - 480 Debit in $ Credit in $ 470 470 Balance sheet Transaction Total Assets Total Liabilities Stckholders Equity A Income Statement Revenues Expenses Net Income + B + + D + + + B. 130 E + + Insurance Expense Prepaid Insurance (Insurance expired) 130 F + + + + + C. 1200 Depreciation Expense Accum.Depre - Equip. (To record depreciation) 1200 D. 2940 Unearned Revenue Service Revenue (Services provided) 2940 E. 2240 Salaries Expense Salaries Payable (Salary accrued) 2800 x 4/5 2240 F. 410 Accounts Receivable Service Revenue (Services provided) 410