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The unadjusted trial balance of the Dairy Plus Company as of December 31, 2017 is found...

The unadjusted trial balance of the Dairy Plus Company as of December 31, 2017 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Dairy Plus Company.

1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2017. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.

2) Based on a physical count, supplies on hand total $4,050. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.

3) The equipment is expected to have a 4-year useful life, and be worth about $10,000 at the end of four years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry to record the monthly depreciation, if any.

4) On December 26, the client paid a $13,800 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any.

5) Dairy Plus's employee earns $120 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and prepare the necessary adjusting entry, if any.

6) In the second week of December, Dairy Plus agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $5,820. The terms of the initial agreement call for Dairy Plus to provide services from December 12, 2017, through January 10, 2018, or 30 days of service. The club agrees to pay Dairy Plus $5,820 on January 10, 2018, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.

Unadjusted

Dairy Plus
Trial Balance
December 31, 2017
Account Title Debit Credit
Cash 28,075
Supplies 5,400
Prepaid insurance 6,600
Equipment 24,400
Accounts payable 10,200
Unearned consulting revenue 13,800
R. Richards, Capital 38,000
R. Richards, Withdrawals 1,300
Consulting revenue 7,300
Rental revenue 800
Salaries expense 2,040
Rent expense 1,900
Utilities expense 385
Total 70,100

70,100

I want the general journal answers.

Solutions

Expert Solution

  • Working forms part of the answer
  • Adjusting Journal Entries

Transaction No

General Journal

Dr (in $)

Cr (in $)

Working and Explanations

1

Insurance expense

275

$6600 is for 24 month. In 2017, only 1 month as paid on Dec 1. Hence, Expense charged will be $6600x1/24

Prepaid Insurance

275

2

Supplies expense

1350

Supplies balance shows $5400, but physical count shows $4050. Difference is consumed supplies expense

Supplies

1350

3

Depreciation Expense-Equipment

3600

Depreciation=Cost-Salvage value/Life=(24400-10000)/4

Accumulated Depreciation-Equipment

3600

4

Unearned Consulting Revenue

1150

Revenue earned is of 5 days-from Dec 27 to Dec 31. Hence=13800/60x5days

Consulting Revenue

1150

5

Salaries expense

360

Salary paid for Dec 29-Dec 31-3 days x $120 per day

Salaries payable

360

6

Accounts receivables

3880

revenue for period from Dec12 to Dec 31 (20 days) is to be recognised. Hence, 5820/30x20days

Consulting Revenues

3880

ekkarill92 answered 2 years ago
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