a. Depreciation onthe company's equipment for 2011 is computed to be $12,000. b. The Prepaid Insurance account had a $5,000 debit balance atDecember 31, 2011, before adjusting for the costs of any expiredcoverage. An analysis of the companyâs insurance policies showedthat $1,970 of unexpired insurance coverage remains.
c. The Office Supplies account had a $520 debit balance on December31, 2010; and $2,680 of office supplies were purchased during theyear. The December 31, 2011, physical count showed $614 of suppliesavailable.
d. One-third of thework related to $15,000 of cash received in advance was performedthis period. e. The Prepaid Insurance account had a $5,700 debit balance atDecember 31, 2011, before adjusting for the costs of any expiredcoverage. An analysis of insurance policies showed that $3,730 ofcoverage had expired.
f. Wage expenses of$2,000 have been incurred but are not paid as of December 31,2011.
Prepare adjusting journal entries for the year ended (date of)December 31, 2011, for each of the above separate situations.Assume that prepaid expenses are initially recorded in assetaccounts. Also assume that fees collected in advance of work areinitially recorded as liabilities.
| a. | Depreciation onthe company's equipment for 2011 is computed to be $12,000. |
| b. | The Prepaid Insurance account had a $5,000 debit balance atDecember 31, 2011, before adjusting for the costs of any expiredcoverage. An analysis of the companyâs insurance policies showedthat $1,970 of unexpired insurance coverage remains. |
| c. | The Office Supplies account had a $520 debit balance on December31, 2010; and $2,680 of office supplies were purchased during theyear. The December 31, 2011, physical count showed $614 of suppliesavailable. |
| d. | One-third of thework related to $15,000 of cash received in advance was performedthis period. |
| e. | The Prepaid Insurance account had a $5,700 debit balance atDecember 31, 2011, before adjusting for the costs of any expiredcoverage. An analysis of insurance policies showed that $3,730 ofcoverage had expired. |
| f. | Wage expenses of$2,000 have been incurred but are not paid as of December 31,2011. |
Prepare adjusting journal entries for the year ended (date of)December 31, 2011, for each of the above separate situations.Assume that prepaid expenses are initially recorded in assetaccounts. Also assume that fees collected in advance of work areinitially recorded as liabilities.
Related questions
| a. | Two-thirds ofthe work related to $12,000 cash received in advance is performedthis period. |
| b. | Wages of $8,000are earned by workers but not paid as of December 31, 2011. |
| c. | Depreciation onthe companyâs equipment for 2011 is $10,720. |
| d. | The Office Supplies account had a $310 debit balance on December31, 2010. During 2011, $6,368 of office supplies are purchased. Aphysical count of supplies at December 31, 2011, shows $687 ofsupplies available. |
| e. | The Prepaid Insurance account had a $5,000 balance on December31, 2010. An analysis of insurance policies shows that $1,900 ofunexpired insurance benefits remain at December 31, 2011. |
| f. | The company hasearned (but not recorded) $750 of interest from investments in CDsfor the year ended December 31, 2011. The interest revenue will bereceived on January 10, 2012. |
| g. | The company has a bank loan and has incurred (but not recorded)interest expense of $3,000 for the year ended December 31, 2011.The company must pay the interest on January 2, 2012. |
For each of the above separate events, prepare the requiredadjusting entries for the year ended December 31, 2011 (Assume thatprepaid expenses are initially recorded in asset accounts and thatfees collected in advance of work are initially recorded asliabilities.)
