Question

Jaworski's Ski Store is completing the accounting process for its first year ended December 31, 2018. The transactions during 2018 have been journalized and posted. The following data are available to determine adjusting journal entries: a. The unadjusted balance in Supplies was $930 at December 31, 2018. The unadjusted balance in Supplies Expense was $0 at December 31, 2018. A year-end count showed $110 of supplies on hand. b. Wages earned by employees during December 2018, unpaid and unrecorded at December 31, 2018, amounted to $4500. The last paychecks were issued December 28; the next payments will be made on January 6, 2019. c. A portion of the store's basement is now being rented for $1180 per month to K. Frey. On November 1, 2018, the store collected six months' rent in advance from Frey in the amount of $7,080. It was credited in full to Deferred Revenue when collected. The unadjusted balance in Rent Revenue was $0 at December 31, 2018, d. The store purchased delivery equipment at the beginning of the year. The estimated depreciation for 2018 is $2,800, although none has been recorded yet. e. On December 31, 2018, the unadjusted balance in Prepaid Insurance was $3,480. This was the amount paid in the middle of the year for a two-year insurance policy with coverage beginning on July 1, 2018 f. Jaworski's store did some ski repair work for Frey. At the end of December 31, 2018, Frey had not paid for work completed amounting to $830. This amount has not yet been recorded as Service Revenue. Collection is expected during January 2019.

Answer 1

S. NO.	Accounting Description	Dr.	Cr.
a.	Income Statement A/c Dr.	820
	To Supplies		820
b.	Wages Expenses A/c Dr.	4500
	To Wages Payable A/c		4500
c.	Deferred Revenue A/c Dr.	2360
	To Rent Revenue A/c		2360
d.	Depreciation A/c Dr.	2800
	To Fixed Assets A/c		2800
e.	Insurance Expenses A/c Dr.	870
	To Prepaid Insurance A/c		870
f.	Debtors A/c Dr.	830
	To Repair Revenue A/c		830

S. NO.	Explanation
a.	As here, Supplies shall be recorded at 110, Hence Decrease in Valuation shall be Passed on through Incoem Statement.
b.	As, Considering Matching Concept, Expesnes for the perido shall be charged against the incoem statement fro period 2018 only, Such expenses shal stands payable and Shall be charegd to Income Statement.
c.	As, Advance Payment is Liability, Shall be charged off or knock off against the revenue or performance completed against such Payment.
d.	Depreciation need to be charged off, against Fixed Asset - Equipment, Such Depreciation shall be Passed on Through Income Statement.
e.	As, Expenses are already paid off, but expenses pertaining to current period, shall be required to charged to income statement.
f.	AS per Revenue Recognition , Revenue shall be included in books when 100% sure that payment will be recived irrespective of the fact of recipt on real time basis.

S. NO.	Assets	Liabilities	StockHOlder Equity	Income	Expenses
a.	Decline by 820		-	-	Decline by 820
	-		-	-	-
b.	-		-	-	-
	-	Increase in Liability by 4500	-	-	Increase in Expenses by 4500
c.	-		-	-	-
	-	Decrease in Liability ( Deferred Revenue by 2 Months)	-	Increase in Income by 2 Months )	-
	-	Deferred Revenue will be currently Stated at 1180X 4 = 4720	-	-	-
d.	Fixed Assets Decline by 2800	-	-	-	Depreciation Charged by 2800
	-	-	-	-
e.	Prepaid Insurance Balance Reduce by 145 X 6 = 870	-	-	-	Insurance Expenses in Income Statement by 870
		-	-	-	-
f.	Debtors Incrreased By 830	-	-	Increase in Income by 830	-

S. NO.	Assets	Liabilities	StockHOlder Equity	Income	Expenses
a.	-820				-820
b.		4500			-4500
c.		-2360		2360
d.	-2800				-2800
e.	-870				-870
f.	830			830
	-3660	2140		3190	-8990
	Income Statement Difference is -5800 , which is then Transfred to Stockholder, ( -5800 +2190) = -3660