To determine Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31. Explanation Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity ) to maintain the records according to accrual basis principle. a. Prepare adjusting entry for supplies purchased. Supplies expense is an expense account and it decreases the stockholders’ equity account. Therefore, debit supplies expense with $3,000. Supplies are the asset account and it is decreased. Therefore, credit supplies with $3,000. Working note: Calculate the Supplies used during the year. Supplies used during the year = ( Supplies as on November 30+Supplies purchased − Supplies as on December 31 ) = $ 2 , 000 + $ 4</

Financial Accounting Connect Access Card

5th Edition

ISBN: 9781260159622

Author: J. David Spiceland

Publisher: Mcgraw-Hill

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Chapter 3, Problem 7E

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Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31.

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Chapter 3, Problem 6E

Chapter 3, Problem 8E

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Financial Accounting Connect Access Card

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