Question

In: Accounting

Barkers, Inc. had the following selected accounts in its unadjusted trial balance: Accounts receivable &nb

Barkers, Inc. had the following selected accounts in its unadjusted trial balance:

Accounts receivable $176,000

Prepaid rent 54,000

Prepaid insurance 24,000

Equipment 300,000

Accumulated depreciation-equipment 30,000

Unearned service revenue 24,000

Salary expense 130,000

Additional data:

One-third of the revenue received in advance has been earned by December 31, 2017.

The prepaid insurance represents three years’ premium on a policy providing coverage starting October 1, 2017.

Since the last payday, employees have earned an additional $2,000 which has not yet been paid or recorded.

The equipment has an estimated life of 6 years and no expected value at the end of its life. (Prepare the entry for depreciation expense.)

Services performed but unbilled and uncollected at year end amount to $5,000.

The prepaid rent relates to one year of rent beginning on September 1, 2017.

REQUIRED: Prepare the necessary year-end adjusting entries as of December 31, 2017

Expert Solution

Prepare the necessary year-end adjusting entries as of December 31, 2017

Date	account and explanation	debit	credit
Dec 31,2017	Unearned service revenue (24000/3)	8000
	Service revenue		8000
	(To record revenue earned)

Dec 31,2017	Insurance expense (24000*3/36)	2000
	Prepaid insurance		2000
	(To record insurance expense)

Dec 31,2017	Salary expense	2000
	Salary payable		2000
	(To record accured salaries)

Dec 31,2017	Depreciation expense	50000
	Accumulated depreciation-equipment		50000
	(To record dep)

Dec 31,2017	Account receivable	5000
	Service revenue		5000
	(To record service performed)

Dec 31,2017	Rent expense (54000*4/12)	18000
	Prepaid rent		18000
	(To record rent expense)

ekkarill92 answered 1 year ago

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