Question

The unadjusted trial balance of the Contracts Plus Company as of December 31 is found on the trial balance tab. The following Information is required to prepare the necessary adjusting entries for the Contracts Plus Company 1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any. 2) Based on a physical count, supplies on hand total $3,150. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any. 3) The equipment is expected to have an 5-year useful life, and be worth about $12,000 at the end of five years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry to record the monthly depreciation, if 4) On December 26, the client paid a $10,200 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any. 5) Contracts Plus's employee earns $140 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and prepare the necessary adjusting entry, if any. 6) In the second week of December, Contracts Plus agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $4,380. The terms of the initial agreement call for Contracts Plus to provide services from December 12, through January 10, or 30 days of service. The club agrees to pay Contracts Plus $4,380 on January 10, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any. any Requirement General Journal General Ledger Trial Balance Income Statement St Retained Earnings Balance Sheet Impact on Income In chapter 2, we learned how to prepare journal entries for external transactions; transactions between the company and other entities. In this chapter, we will review the trial balance to see if the balances have remained accurate, or whether they have become inaccurate as a result of internal transactions (le, the use of supplies, or the use of insurance coverage). This question will review the unadjusted trial balance presented in chapter 2, and demonstrate the adjusting entry process used to ensure the accuracy of the general ledger balances prior to the preparation of financial statements. General Journal tab - For transactions 1-6, review the unadjusted balance and prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred. General Ledger tab. Each Journal entry is posted automatically to the general ledger. Use the drop down button to view the unadjusted or adjusted balances. Trial Balance tab. You may view either the unadjusted or adjusted balances by choosing from the dropdown box below. Your choice will determine the reported values on the financial statement tabs Income Statement, Statement of Retained earnings, Balance Sheet tabs - The financial statements will display the unadjusted or adjusted balances, based on your selection, Impact on Income tab. For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income hefna semente ran he found on the income talementah Hint Colortunatel nn the drawn

Answer 1

Date	General Journal	Debit	Credit
		$	$
Dec 31	Insurance Expense	125
	Prepaid Insurance		125
Dec 31	Supplies Expense	1,050
	Supplies		1,050
Dec 31	Depreciation Expense	350
	Accumulated Depreciation : Equipment		350
Dec 31	Unearned Consulting Revenue ( 10,200 / 60 * 5 )	850
	Consulting Revenue		850
Dec 31	Salaries Expense ( $ 140 x 3 days)	420
	Salaries Payable		420
Dec 31	Accounts Receivable ( $ 4,380 / 30 days * 20 days)	2,920
	Consulting Revenue		2,920