Adjusting and closing entries.Sanford Cleaning and Maintenance, owned by Fred Sanford, pro...

Adjusting and closing entries.

Sanford Cleaning and Maintenance, owned by Fred Sanford, provides cleaning services to hotels, motels, and hospitals. On January 31, 2016, the firm’s worksheet showed the following adjustment data. The balances of the revenue and expense accounts listed in the Income Statement section of the worksheet and the drawing account listed in the Balance Sheet section of the worksheet are also given.

ADJUSTMENTS

a. Supplies used, $4,290

b. Expired insurance, $2,220

c. Depreciation on machinery, $1,680

REVENUE AND EXPENSE ACCOUNTS

INSTRUCTIONS

1. Record the adjusting entries in the general journal, page 3.

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2. Record the closing entries in the general journal, page 4. Use account numbers provided on page 186 for any account number not given.

Analyze: What effect did the adjusting entry for expired insurance have on the Insurance Expense account?