Adjusting and closing entries.
Wilson Cleaning and Maintenance, owned by James Wilson, provides cleaning services to hotels, motels, and hospitals. On January 31, 2010, 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, | $2,860 |
b. Expired insurance, | $1,480 |
c. Depreciation on machinery, | $1,120 |
REVENUE AND EXPENSE ACCOUNTS |
|
401 Fees Income | $32,800 Cr. |
511 Depreciation Expense—Machinery | 1,120 Dr. |
514 Insurance Expense | 1,480 Dr. |
517 Rent Expense | 3,000 Dr. |
520 Salaries Expense | 16,000 Dr. |
523 Supplies Expense | 2,860 Dr. |
526 Telephone Expense | 210 Dr. |
529 Utilities Expense | 640 Dr. |
DRAWING ACCOUNT |
|
302 James Wilson, Drawing | 2,400 Dr. |
INSTRUCTIONS
1. Record the adjusting entries in the general journal, page 3.
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?
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