Question

Exercise 4-9 (Static) Record transactions and adjustments LO 2, 6,7 ook Record the effect, If any of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by entering the account name and amount and indicating whether it is an addition (+) or subtraction (-). Column headings reflect the expanded balance sheet equation; items that affect net income should not be shown as affecting stockholders' equity. The first transaction is provided as an illustration a. During the month, the Supplies (asset) account was debited $3,600 for supplies purchased. The cost of supplies used during the month was $2,800. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month b. An insurance premium of $960 was paid for the coming year. Prepaid Insurance was debited. c. Wages of $6,400 were paid for the current month. d. Interest revenue of $500 was received for the current month. e. Accrued $1,400 of commissions payable to sales staff for the current month. f. Accrued $260 of Interest expense at the end of the month g. Received $4,200 on accounts receivable accrued at the end of the prior month. h. Purchased $1.200 of merchandise Inventory from a supplier on account 1. Pald $320 of interest expense for the month. J. Accrued $1.600 of wages at the end of the current month. k. Pald $1,000 of accounts payable int 1 Required: a. Indicate the financial statement effect b. Prepare the journal entry for the above transactions Complete this question by entering your answers in the tabs below. Required A Required B

Answer 1

Required A

Balance Sheet Categoty		Income Statement
Transaction / Adjustment	Assets	=	Liability	+	Shareholders' Equity		Net Income Effect
a	Supplies = - 2,800						Supplies Expenses = -2,800
b	Cash = -960						Prepaid Insurance = -960
c	Cash = -6,400						Wages Expenses = -6,400
d	Cash = + 500						Interest Revenue = + 500
e			CommissionPayable = + 1400				Commission Expenses = - 1,400
f			Interest Payable = +260				Interest Expenses = -260
g	Cash = + 4,200 Accounts Receivable = - 4,200
h			Accounts Payable = +1,200				Puchase = - 1,200
i	Cash = - 320						Interest Expenses = -320
j			Wages Payable = +1,600				Wages Expenses = 1,600
k	Cash = - 1,000		Accounts Payable = -1000

Required B

Event	General Journal	Debit	Credit
a	Supplies Expenses A/C.............. Dr, To Supplies A/C (Being Cost ofsupplies used during the month was $2,800.00)	2,800.00	2,800.00
b	Prepaid Insurance A/C.................Dr. To Cash A/c (Being insurance premium paid in advance for coming year.)	960.00	960.00
c	Wages Expenses A/C...................Dr To Cash A/C ( Being wages paid for the currrent month)	6,400.00	6,400.00
d	Cash A/C .....................................Dr. To Interest Revenue A/C (Being Interest Revenue received for the current month)	500.00	500.00
e	Commission Expenses A/C ........Dr. To Commission Payable A/C (Being commission payable to sales agent for the current month.)	1,400.00	1,400.00
f	Interest Expenses A/C ................Dr. To Interest Payable A/C (Being accrued of interest expenses at the end of the month)	260.00	260.00
g	Cash A/C........................................Dr To Accounts Receivable A/C (Being accounts receivable accrued at the end of the prior month, now received)	4,200.00	4,200.00
h	Purchased A/C ...........................Dr. To Accounts Payble A/C (Being purchased merchandise inventory from a supplier on account)	1,200.00	1,200.00
i	Interest Expenses A/C................Dr. To Cash A/C ( Being interest expenses paid for current month)	320.00	320.00
j	Wages Expenses A/C ...................Dr To Wages Payable A/C (Being wages accrued for the current month)	1,600.00	1,600.00
k	Accounts Payable A/C...................Dr. To Cash A/C ( Being amount paid for accounts payable)	1,000.00	1,000.00