Question

Module 3 Checkpoint Problem Name The trial balance of Rocket J. Squirrel Co. on December 31, 2020 appeared as follows: Rocket J. Squirrel Co. Trial Balance As of December 31 DR CR Cash 1,970 Accounts Receivable 250 Supplies 1,880 Prepaid Insurance 3,600 Equipment 4,400 Accumulated Depr. -Equip. 600 Accounts Payable 340 Notes Payable 500 Unearned Revenue 1,200 Common Stock 2.500 Retained Earnings 2,420 Dividends Declared 300 Service Revenue 14,200 Advertising Expense 1,600 Salaries Expense 4,440 Rent Expense 1,900 Utilities Expense 1,420 Totals 21,760 21,760 Following is the adjusting data on December 31, 2020. Adusting entries are prepared ANNUALLY (once each year) on December 31. Accrued salaries on December 31 are $760. b. On August 1, 2020, Rocket had purchased one-year insurance policy costing $3,600. The effective date of the policy was August 1, 2020. c. Supplies costing $480 remain on hand on December 31. d. On November 1, 2020, Rocket had received a $1,200 cash advance from a customer for 6 months of services to be performed beginning on November 1, 2020. Interest accrued on the note payable as of December 31 is $40. Services performed but unrecorded as of December 31 are $3,200. Depreciation on the equipment is $200 per year. REQUIRED: Prepare the required adjusting entries for Rocket J. Squirrel Co. on December 31, 2020. f.

Answer 1

Adjusting Entries:

Date	Account title and expalanation	Debit	Credit
Dec 31	Salaries expense	$760
	Salaries payable		$760
	[To record accrued salaries expense]
Dec 31	Insurance expense [$3600 x 5/12]	$1,500
	Prepaid insurance		$1,500
	[To record insurance expense]
Dec 31	Supplies expense [1880-480]	$1,400
	Supplies		$1,400
	[To record supplies expense]
Dec 31	Unearned revenue	$200
	Service revenue [1200 x 2/12]		$200
	[To record revenue from unearned]
Dec 31	Interest expense	$40
	Interest payable		$40
	[To record accrued interest expense]
Dec 31	Accounts receivable	$3,200
	Service revenue		$3,200
	[To record accrued service revenue]
Dec 31	Depreciation expense	$200
	Accumulated depreciation-Equipment		$200
	[To record depreciation expense]