Question

12/31/2018

Each Friday, Laughter pays employees for the current week's work. The amount of the weekly payroll is $8,000 for a five-day workweek. This year, December 31 falls on a Tuesday. Laughter will pay its employees on January 3.

12/31/2018

On January 1 of the current year, Laughter purchased an insurance policy that covers two years, $8,000.

12/31/2018

The beginning balance of Office Supplies was $4,300. During the year, Laughter purchased office supplies for $5,600, and at December 31 the office supplies on hand total $1,500.

12/31/2018

During December, Laughter designed a landscape plan for Carly Enterprises, which prepaid $6,500. Laughter recorded this amount as Unearned Revenue. The job will be complete in February 2019. Laughter estimates that the company has earned 40% of the total revenue as of December 31.

12/31/2018

At December 31, Laughter had earned $3,000 for landscape services completed for Turkey Appliances. Turkey has stated that it will pay Laughter on January 10.

12/31/2018

Depreciation for the current year includes Equipment, $3,000; and Trucks, $2,200. (Complete a compound entry for this transaction).

12/31/2018

Laughter has incurred $250 of interest expense on a $550 interest payment due on January 15.

01/03/2019

Paid employee salaries for the week, $8,000.

01/10/2019

Collected $3,000 from Turkey Appliances for work completed in December.

01/15/2019

Paid $550 interest payment.

02/28/2019

Completed landscape project for Carly Enterprises, who had paid in advance.

• S

Answer 1

1	Adjusting entries
a	Salaries and wages expense	3200	(8000*2/5)
	Salaries and wages payable		3200
b	Insurance expense	4000	(8000*1/2)
	Prepaid insurance		4000
c	Supplies expense	8400	(4300+5600-1500)
	Office supplies		8400
d	Unearned revenue	2600	(6500*40%)
	Service revenue		2600
e	Accounts receivable	3000
	Service revenue		3000
f	Depreciation expense	5200
	Accumulated depreciation-equipment		3000
	Accumulated depreciation-trucks		2200
g	Interest expense	250
	Interest payable		250
2
a	Salaries and wages payable	3200
	Cash		3200
d	Unearned revenue	3900	(6500*60%)
	Service revenue		3900
g	Interest payable	250
	Cash		250