URGENT PLEASE
Arnez Co. follows the practice of recording prepaid expenses and unearned revenues in balance sheet accounts. The companyâs annual accounting period ends on December 31, 2015. The following information concerns the adjusting entries to be recorded as of that date.
a. The Office Supplies account started the year with a $4,275 balance. During 2015, the company purchased supplies for $17,656, which was added to the Office Supplies account. The inventory of supplies available at December 31, 2015, totaled $3,762.
b. An analysis of the company's insurance policies provided the following facts.
Policy Date of Purchase Months of Coverage Cost A April 1, 2014 24 $ 11,256 B April 1, 2015 36 10,080 C August 1, 2015 12 8,856
The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)
c. The company has 15 employees, who earn a total of $2,400 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2015, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Yearâs Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2016.
d. The company purchased a building on January 1, 2015. It cost $640,000 and is expected to have a $45,000 salvage value at the end of its predicted 20-year life. Annual depreciation is $29,750.
e. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $3,100 per month, starting on November 1, 2015. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again.
f. On November 1, the company rented space to another tenant for $2,809 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account.
1}
Record the adjusting entry related to the company's insurance
2) The company has 15 employees, who earn a total of $2,400 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2015, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Yearâs Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2016.
3)The company purchased a building on January 1, 2015. It cost $640,000 and is expected to have a $45,000 salvage value at the end of its predicted 20-year life. Annual depreciation is $29,750.
4)Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $3,100 per month, starting on November 1, 2015. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again.
5)On November 1, the company rented space to another tenant for $2,809 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account
6)Record payment of accrued and current salaries.
7)Record the receipt of two months rent.
| URGENT PLEASE Arnez Co. follows the practice of recording prepaid expenses and unearned revenues in balance sheet accounts. The companyâs annual accounting period ends on December 31, 2015. The following information concerns the adjusting entries to be recorded as of that date. |
| a. | The Office Supplies account started the year with a $4,275 balance. During 2015, the company purchased supplies for $17,656, which was added to the Office Supplies account. The inventory of supplies available at December 31, 2015, totaled $3,762. |
| b. | An analysis of the company's insurance policies provided the following facts. |
| Policy | Date of Purchase | Months of Coverage | Cost | |
| A | April 1, 2014 | 24 | $ | 11,256 |
| B | April 1, 2015 | 36 | 10,080 | |
| C | August 1, 2015 | 12 | 8,856 | |
| The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.) | |
| c. | The company has 15 employees, who earn a total of $2,400 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2015, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Yearâs Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2016. |
| d. | The company purchased a building on January 1, 2015. It cost $640,000 and is expected to have a $45,000 salvage value at the end of its predicted 20-year life. Annual depreciation is $29,750. |
| e. | Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $3,100 per month, starting on November 1, 2015. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again. |
| f. | On November 1, the company rented space to another tenant for $2,809 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account. |
1}
Record the adjusting entry related to the company's insurance
2) The company has 15 employees, who earn a total of $2,400 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2015, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Yearâs Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2016.
3)The company purchased a building on January 1, 2015. It cost $640,000 and is expected to have a $45,000 salvage value at the end of its predicted 20-year life. Annual depreciation is $29,750.
4)Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $3,100 per month, starting on November 1, 2015. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again.
5)On November 1, the company rented space to another tenant for $2,809 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account
6)Record payment of accrued and current salaries.
7)Record the receipt of two months rent.
Related questions
Fes Company is making adjusting journal entries for the yearended December 31, 2015. In developing information for theadjusting journal entries, you learned the following:
| a. | A two-year insurance premium of $8,200 was paid on January 1,2015, for coverage beginning on that date. As of December 31, 2015,the unadjusted balances were $8,200 for Prepaid Insurance and $0for Insurance Expense. |
| b. | At December 31, 2015, you obtained the following data relatingto supplies. |
| Unadjusted balance in Supplies on December 31,2015 | $ | 20,000 | ||
| Unadjusted balance in Supplies Expense on December 31,2015 | 82,000 | |||
| Supplies on hand, counted on December 31, 2015
| 14,000 |
Arnez Co. follows the practice of recording prepaid expenses andunearned revenues in balance sheet accounts. The companyâs annualaccounting period ends on December 31, 2013. The followinginformation concerns the adjusting entries to be recorded as ofthat date.
| a. | The Office Supplies account started the year with a $2,800balance. During 2013, the company purchased supplies for $11,564,which was added to the Office Supplies account. The inventory ofsupplies available at December 31, 2013, totaled $2,464. |
| b. | An analysis of the company's insurance policies provided thefollowing facts. |
| Policy | Date ofPurchase | Months ofCoverage | Cost | |
| A | April 1, 2012 | 24 | $ | 10,464 |
| B | April 1, 2013 | 36 | 9,216 | |
| C | August 1, 2013 | 12 | 8,064 | |
The total premium for each policy was paid in full (for allmonths) at the purchase date, and the Prepaid Insurance account wasdebited for the full cost. (Year-end adjusting entries for PrepaidInsurance were properly recorded in all prior years.) |
| c. | The company has 15 employees, who earn a total of $2,500 insalaries each working day. They are paid each Monday for their workin the five-day workweek ending on the previous Friday. Assume thatDecember 31, 2013, is a Tuesday, and all 15 employees worked thefirst two days of that week. Because New Yearâs Day is a paidholiday, they will be paid salaries for five full days on Monday,January 6, 2014. |
| d. | The company purchased a building on January 1, 2013. It cost$870,000 and is expected to have a $45,000 salvage value at the endof its predicted 25-year life. Annual depreciation is $33,000. |
| e. | Since the company is not large enough to occupy the entirebuilding it owns, it rented space to a tenant at $2,100 per month,starting on November 1, 2013. The rent was paid on time on November1, and the amount received was credited to the Rent Earned account.However, the tenant has not paid the December rent. The company hasworked out an agreement with the tenant, who has promised to payboth December and January rent in full on January 15. The tenanthas agreed not to fall behind again. |
| f. | On November 1, the company rented space to another tenant for$1,903 per month. The tenant paid five months' rent in advance onthat date. The payment was recorded with a credit to the UnearnedRent account. |
| Required: | |
| 1. | Use the information to prepare adjusting entries as of December31, 2013. |
| Adjustingentries (all dated December 31, 2013). |
| 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.
