Question

Fes Company is making adjusting journal entries for the year ended December 31, 2018. In developing information for the adjusting journal entries, you learned the following: a. A two-year insurance premium of $6,900 was paid on January 1, 2018, for coverage beginning on that date. As of December 31, 2018, the unadjusted balances were $6,900 for Prepaid Insurance and $0 for Insurance Expense. b. At December 31, 2018, you obtained the following data relating to supplies. Unadjusted balance in Supplies on December 31, 2018 Unadjusted balance in Supplies Expense on December 31, 2018 Supplies on hand, counted on December 31, 2018 $13,500 69,000 8,800 Required: 1. Of the $6,900 paid for insurance, what amount should be reported on the 2018 income statement as Insurance Expense? What amount should be reported on the December 31, 2018, balance sheet as Prepaid Insurance? 2. What amount should be reported on the 2018 income statement as Supplies Expense? What amount should be reported on the December 31, 2018, balance sheet as Supplies? 3. Indicate the accounting equation effects of the adjustment required for (a) insurance and (b) supplies. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Indicate the accounting equation effects of the adjustment required for (a) insurance and (b) supplies. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity Transaction Arente Liabilities Stockholdere! Fruit

I have everything else done, but I can't figure out the supplies and supplies expense. I have also tried 4,400 positive.

Answer 1

Assets		=	Liabilities		+	Stockholders' Equity
Supplies	($4,700)					Supplies expense	$ 4,700

Explanation:

Supplies on Dec 31 2018 - Unadjusted balance	$ 13,500
Supplies hand on Dec 31 2018	($ 8,800)
Supplies expense - Adjustment	$ 4,700