Question

Required information [The following information applies to the questions displayed below.) a. Wages of $6,000 are earned by workers but not paid as of December 31. b. Depreciation on the company's equipment for the year is $10,360. c. The Supplies account had a $330 debit balance at the beginning of the year. During the year, $6,288 of supplies are purchased. A physical count of supplies at December 31 shows $679 of supplies available. d. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $2,100 of unexpired insurance benefits remain at December 31. e. The company has earned (but not recorded) $600 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10. f. The company has a bank loan and has incurred (but not recorded) interest expense of $3,000 for the year ended December 31. The company will pay the interest five days after the year-end on January 5. For each of the above separate cases, analyze each adjusting entry by showing its effects on the accounting equation-specifically, dentify the accounts and amounts (including (+) increase or (-) decrease) for each transaction or event. Assets Liabilities + Equity a. + b. + C. + d. + e. + f. +

Answer 1

Accounting equation

	Assets			=	Liabilities			+	Stockholder's equity
a					wages payable	+	6000		Wages expense	-	6000
b	Accumulated depreciation	-	10360						Depreciation expense	-	10360
c	Supplies	-	5939						Supplies expense	-	5939
d	Prepaid insurance	-	2900						Insurance expense	-	2900
e	Interest receivable	+	600						Interest revenue	+	600
f					Interest payable	+	3000		Interest expense	-	3000