Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information: November 30 Debit CreditSupplies $2,000Prepaid Insurance 8,000Salaries Payable $11,000Deferred Revenue 3,000The following information is known for the month of December:1. Purchases of supplies during December total $4,500. Supplies on hand at the end of December equal $3,500.2. No insurance payments are made in December. Insurance cost is $2,000 per month.3. November salaries payable of $11,000 were paid to employees in December. Additional salaries for December owed at the end of the year are $16,000.4. On November 1, a tenant paid Golden Eagle $4,500 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.Required:Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted
November 30
Debit Credit
Supplies $2,000
Prepaid Insurance 8,000
Salaries Payable $11,000
Deferred Revenue 3,000
The following information is known for the month of December:
1. Purchases of supplies during December total $4,500. Supplies on hand at the end of December equal $3,500.
2. No insurance payments are made in December. Insurance cost is $2,000 per month.
3. November salaries payable of $11,000 were paid to employees in December. Additional salaries for December owed at the end of the year are $16,000.
4. On November 1, a tenant paid Golden Eagle $4,500 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.
Required:
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