Question

Adjusting Entries Judy Rock began Rock Refinishing Service on July 1. Selected accounts are shown below as of July 31, before any adjusting entries have been made: Debit Credit Prepaid rent $6,000 Prepaid advertising 930 Supplies 3.000 Unearned refinishing fees 800 Refinishing fees revenue 2,500 Using the following information, record in a general Journal the necessary adjusting entries on July 31 a. On July 1, the firm paid one year's rent of $6,000. b. On July 1, 5930 was paid to a local newspaper for an advertisement to run daily for the months of July, August and September c. Supplies on hand at July 31 total $1,100. d. At July 31, refinishing services of $975 have been performed but not yet billed to customers. The firm uses the account Fees Receivable to reflect amounts due but not billed. e. One customer paid $1,100 in advance for a refinishing project. At July 31, the project is one-half complete, Round your answers to the nearest dollar

Answer 1

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Judy Rock
Workings for adjustment entries:	Amount $	Note
Yearly Rent	6,000.00	A
Monthly Rent	500.00	B=A/12
Advertising fro 3 months	930.00	C
Monthly Advertising	310.00	D=C/3
Supplies in ledger	3,000.00	E
Less: Supplies on hand	1,100.00	F
Supplies expense	1,900.00	G=E-F
Unearned revenue for 2 months	1,100.00	M
Earned revenue for 1 month	550.00	N=M/2

	Adjustment entries:
Date	Account	Post Ref	Debit $	Credit $	Note
31-Jul	Rent expense		500.00		See Note B
	Prepaid Rent			500.00
31-Jul	Advertising expense		310.00		See Note D
	Prepaid Advertising			310.00
31-Jul	Supplies expense		1,900.00		See Note G
	Supplies			1,900.00
31-Jul	Fees Receivable		975.00		This is already provided in the problem.
	Refinishing fees revenue			975.00
31-Jul	Unearned refinishing fees		550.00		See Note N
	Refinishing fees revenue			550.00