Question

PE 3-3A Adjustment for prepaid expense OBJ. 2 The supplies account had a beginning balance of $3,375 and was debited for $6,450 for supplies purchased during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of supplies on hand is $2,980.

Answer 1

SOLUTION 1:
		Adjutement for Prapid expenses
		Beginning Balance of Supplies	$                     3,375
		Add: Purchases	$                     6,450
		Total	$                     9,825
		Less: Supplies in hand	$                     2,980
		Supplies Expenses	$                     6,845
	Journal Entries
	Date	Account Title and explanation	Debit	Credit
	-------------	Supplies Expenses	$                     6,845
		Supplies		$                   6,845
		(To record the supplies expenses)
SOLUTION 2:	Adjutement for Unearned Revenue
		Balance in unearned revenue before adjustement	$2,72,500
		Less: Unearned Fees at the end of the year	$1,89,750
		Earned Revenue	$82,750
	Journal Entries
	Date	Account Title and explanation	Debit	Credit
	-------------	Unearned Revenue	$                   82,750
		Fees Revenue		$                82,750
		(To Record the Earned Revenue )