Question

At December 31, the following information was available. Make any necessary adjusting entries in spaces provided

1. The machine were purchased for $34995 on 12/1 and have an estimated useful life of 5 years with zero salvage value. The company uses

straight line depreciation. Make the depreciation adjustment for the machine for the month of December

2. A physical count of supplies at month end shows $675 worth of supplies on hand. Supplies had a beginning balance of $615.

The company had purchased $563 worth of supplies during the month

3. The four-year note payable for $70000 had an APR of 9% and was purchased on 12/1.

Make the adjustment relating to the note

4. $7000 was prepaid for rent on 12/1 for months of December through April.

Make the adjustment for prepaid rent.

5. Brain's music shop accrues wages in the amount of $705 per day. Payroll is distributed every 2 weeks. Brains last paid its

employees on 12/24. Make the necessary payroll adjustment

6. As of 12/31 Brian's music shop still owed $815 of services to the client from the transaction on 12/6, who had prepaid

$3400 for services

7. The amount recorded for services provided on account on 12/15 should have been $51000 instead of $5100. Correct the

error using only one journal entry

Answer 1

Answer: S No Date Account Title and Narration Debit Credit 31-Dec $ 583.00 Depreciation a/c Accumulated depreciation a/c 583.00 Narration: Being adjustment entry made for depreciaiton 31-Dec 503.00 Supplies expenses a/c Supplies a/c 503.00 Narration: Being adjustment entry made for supplies consumed ($615 + $ 563 - $ 675) 31-Dec 525.00 Interest expenses a/c Interest payable 525.00 Narration: Being adjustment entry made for interest on notes payable @ 9% on $ 70000 for the month of Dec 31 31-Dec $ 1,400.00 Rent expenses a/c Prepaid rent a/c $ 1,400.00 Narration: Being adjustment entry made for rental expenses ($ 7000/5) 5 31-Dec 4,935.00 Wages expenses a/c Wages payable a/c $ 4,935.00 Narration: Being adjustment entry made for wages from 25th Dec to 31st Dec 31-Dec No entry required 31-Dec $ 45,900.00 Services revenue a/c Accounts receivable $ 45,900.00 Narration: Being correction entry made for excess revenue booked earlier ($51,000-$5100)