a. Depreciation on the company's equipment for the year is computed to be $17,000. b. The Prepaid Insurance account had a $8,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1,150 of unexpired insurance coverage remains. c. The Office Supplies account had a $440 debit balance at the beginning of December; and $2,680 of office supplies were purchased in December. The December 31 physical count showed $519 of supplies available. d. One-third of the work related to $15,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,700 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of rental policies showed that $4,550 of rental coverage had expired. f. Wage expenses of $5,000 have been incurred but are not paid as of December 31. Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.
a. Depreciation on the company's equipment for the year is computed to be $17,000. b. The Prepaid Insurance account had a $8,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1,150 of unexpired insurance coverage remains. c. The Office Supplies account had a $440 debit balance at the beginning of December; and $2,680 of office supplies were purchased in December. The December 31 physical count showed $519 of supplies available. d. One-third of the work related to $15,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,700 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of rental policies showed that $4,550 of rental coverage had expired. f. Wage expenses of $5,000 have been incurred but are not paid as of December 31. Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.
**View transaction list**
## Journal entry worksheet
**Transaction 1:**
Depreciation on the company's equipment for the year is computed to be $17,000.
*Note: Enter debits before credits.*
| Transaction | General Journal | Debit | Credit |
|-------------|-----------------|-------|--------|
| a. | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
**Buttons:**
- **Record entry**
- **Clear entry**
- **View general journal**
Transcribed Image Text:**Educational Content: Understanding Adjusting Journal Entries**
In accounting, adjusting journal entries are required to ensure that the financial statements reflect accurate values for a particular period. Below are several scenarios requiring such adjustments at the end of the financial year on December 31:
a. **Depreciation on Equipment**
- Depreciation for the company’s equipment is calculated to be $17,000 for the year.
b. **Prepaid Insurance**
- The Prepaid Insurance account indicates an $8,000 debit balance at December 31 before any adjustments for expired coverage. After analyzing the insurance policies, $1,150 of unexpired insurance coverage is determined to remain.
c. **Office Supplies**
- The Office Supplies account started with a $440 debit balance at the beginning of December. During December, $2,680 of office supplies were bought. However, a physical count on December 31 reveals only $519 of supplies are available.
d. **Unearned Revenue**
- One-third of the work connected to $15,000 of cash received in advance has been completed within this period.
e. **Prepaid Rent**
- The Prepaid Rent account has a $5,700 debit balance at December 31, pending adjustments for expired coverage costs. Post-analysis, it is found that $4,550 worth of rental coverage has expired.
f. **Accrued Wages**
- Wage expenses amounting to $5,000 have been incurred but remain unpaid as of December 31.
To maintain accurate financial records, necessary adjusting journal entries should be prepared for each of the outlined scenarios for the year ending December 31. This process ensures that all revenues and expenses are recognized in the period they occur, providing a true financial position of the company.
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