Question

On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account balances:

Accounts	Debit				Credit
Cash	$	25,500
Accounts Receivable		6,900
Supplies		4,800
Land		67,000
Accounts Payable					$	4,900
Common Stock						82,000
Retained Earnings						17,300
Totals	$	104,200			$	104,200

During January 2021, the following transactions occur:

January		2		Purchase rental space for one year in advance, $11,100 ($925/month).
January		9		Purchase additional supplies on account, $5,200.
January		13		Provide services to customers on account, $27,200.
January		17		Receive cash in advance from customers for services to be provided in the future, $5,400.
January		20		Pay cash for salaries, $13,200.
January		22		Receive cash on accounts receivable, $25,800.
January		29		Pay cash on accounts payable, $5,700.

• Rent for the month of January has expired.
• Supplies remaining at the end of January total $4,500.
• By the end of January, $4,475 of services has been provided to customers who paid in advance on January 17.
• Unpaid salaries at the end of January are $4,610.

2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet < 1 2 3 4 > Record the adjusting entry for rent. Rent for the month of January has expired. Note: Enter debits before credits. General Journal Debit Credit Date January 31 Record entry Clear entry View general journal

• Record the adjusting entry for supplies. Supplies on hand at the end of January total $4,500.

• Record the adjusting entry for rent. Rent for the month of January has expired.

• Record the adjusting entry for services provided to customers who paid in advance. By the end of January, $4,475 of services has been provided to customers who paid in advance on January 17.
• Record the adjusting entry for salaries payable. Unpaid salaries at the end of January are $4,610

Only do whats in bold

Answer 1

Adjusting entries on January 31 are as follows

Date General Journal Debit Credit

($) ($)

01/02/2021 Rent 11100

Cash 11100

( For rent of January 2021 and for the remaining 11 months from Feb

to Dec 2021 paid in advance)

01/31/2021 Profit and loss 925

Rent 925

( Rent for the month of January charged as expense to

Profit and loss)

01/31/2021 Prepaid Rent 10175

Rent 10175

( Rent of 11 months from February to Dec 2021 was

paid in advance $925*11=$10175)

01/09/2021 Supplies 5200

Accounts payable 5200

( Purchase additional supplies on account)

01/31/2021 Profit and loss 5200

Supplies 5200

(Purchased additional supplies on account charged as expense

to profit and loss )

01/31/2021 Closing Inventory 4500

Profit and loss 4500

( Supplies on hand at the end of January was treated as closing inventory

for Jan 31 was credited to profit and loss)

01/17/2021 Cash 5400

Customers 5400

( For cash in advance received from customers for

services to be provided in future)

01/31/2021 Customers 4475

Sales 4475   

( For services provided to customers who paid in advance on January 17 )

01/20/2021 Salary 13200

Cash 13200

(Salary payment in cash

01/31/2021 Profit and Loss 13200

Salary 13200

( For salary paid in cash being charged as expense to profit and loss )

01/31/2021 Salary 4610

Salary Payable 4610

( Being unpaid salary at January 31)

01/31/2021 Salary 4610

Profit and Loss 4610

( Being unpaid salary for January charged to profit and loss)