E4-5 Recording Adjusting Entries and Reporting Balances in Financial Statements LO4-1, LO4-2 A+T Williamson Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: 1. A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1 2 At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents Page 208 Shipping supplies on hand, January 1 of the current year $13,000 Purchases of shipping supplies during the current year 75,000 Shipping supplies on hand, counted on December 31 of the current year 20,000 Required 1. Using the process illustrated in the chapter, record the adjusting entry for insurance at December 31 of the current year 2. Using the process illustrated in the chapter, record the adjusting entry for supplies at December 31 of the current year, assuming that the shipping supplies purchased during the current year were debited in full to the account Shipping Supplies 3. What amount should be reported on the current year's income statement for Insurance Expense? For Shipping Supplies Expense? 4. What amount should be reported on the current year's balance sheet for Prepaid Insurance? For Shipping Supplies?
E4-5 Recording Adjusting Entries and Reporting Balances in Financial Statements LO4-1, LO4-2 A+T Williamson Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: 1. A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1 2 At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents Page 208 Shipping supplies on hand, January 1 of the current year $13,000 Purchases of shipping supplies during the current year 75,000 Shipping supplies on hand, counted on December 31 of the current year 20,000 Required 1. Using the process illustrated in the chapter, record the adjusting entry for insurance at December 31 of the current year 2. Using the process illustrated in the chapter, record the adjusting entry for supplies at December 31 of the current year, assuming that the shipping supplies purchased during the current year were debited in full to the account Shipping Supplies 3. What amount should be reported on the current year's income statement for Insurance Expense? For Shipping Supplies Expense? 4. What amount should be reported on the current year's balance sheet for Prepaid Insurance? For Shipping Supplies?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:E4-5 Recording Adjusting Entries and Reporting Balances in Financial Statements
LO4-1, LO4-2
A+T Williamson Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the
adjusting entries, the accountant learned the following:
1. A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper
debited the full amount to Prepaid Insurance on October 1
2 At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting
documents
Page 208
Shipping supplies on hand, January 1 of the current year
$13,000
Purchases of shipping supplies during the current year
75,000
Shipping supplies on hand, counted on December 31 of the current year
20,000
Required
1. Using the process illustrated in the chapter, record the adjusting entry for insurance at December 31 of the current year
2. Using the process illustrated in the chapter, record the adjusting entry for supplies at December 31 of the current year, assuming that the
shipping supplies purchased during the current year were debited in full to the account Shipping Supplies
3. What amount should be reported on the current year's income statement for Insurance Expense? For Shipping Supplies Expense?
4. What amount should be reported on the current year's balance sheet for Prepaid Insurance? For Shipping Supplies?
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