Question

company s records and related documents: a. On July 1, 2018, a two-year insurance premium on equipment in the amount of $760 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. b. At the end of 2018, the unadjusted balance in the Supplies account was $1,160. A physical count of supplies on December 31, 2018, indicated supplies costing $380 were still on hand. c. On December 31, 2018, YY's Garage completed repairs on one of Brokeback's trucks at a cost of $880. The amount is not yet recorded. It will be paid during January 2019. d. On December 31, 2018, the company completed a contract for an out-of- state company for $8,030 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction. e. On July 1, 2018, the company purchased a new hauling van. Depreciation for July-December 2018, estimated to total $2,830, has not been recorded. f. As of December 31, the company owes interest of $580 on a bank loan taken out on October 1, 2018. The interest will be paid when the loan is repaid on September 30, 2019. No interest has been recorded yet. 9. Assume the income after the preceding adjustments but before income taxes was $38,000. The company's federal income tax rate is 20%. Compute and record income tax expense. Required: Indicate the accounting equation effects (amount and direction) of each adjusting journal entry. Provide an appropriate account name for any revenue and expense effects. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Liabilities Stockholders' Equity Transaction Assets a. 190 b. 1,160 C. 880 d. 8,030 (2,830) e. f. 580 g. 7,600

Answer 1

solutions Transaction stocks holder's equity Assets Liabilities + cal -190 Insurance expense -190 760X6 24 Supplies expense -7801160-380 (6) 780 Repairs and maintance -880 expense (d) 8030 Service revenue 8030 e) -2830 Depreciation expense 2830 580 (f ) Interest expense -580 (9) 7600 Income tax expense - 76001 38000X20%