Question

Analysis of Adjusted Data Selected T-account balances for Parris Company are shown below as of January 31; adjusting entries have already been posted. The firm uses a calendar-year accounting period and makes monthly adjustments.

Supplies
Bal	950

Supplies Expense
Bal	2,540

Prepaid Insurance
Bal	910

Insurance Expense
Bal	182

Wages Payable
Bal		650

Wages Expense
Bal	3,200

Truck
Bal	8,700

Accumulated Depreciation - Truck
Bal		2,610

a. If the amount in Supplies Expense represents the January 31 adjustment for the supplies used in January, and $635 worth of supplies were purchased during January, what was the January 1 balance of Supplies?

$Answer

b. The amount in the Insurance Expense account represents the adjustment made at January 31 for January insurance expense. If the original insurance premium was for one year, what was the amount of the premium and on what date did the insurance policy start?

$Answer Total premium

AnswerJanuary 1February 1March 1April 1May 1June 1July 1August 1September 1October 1November 1December 1 Policy start date

c. If we assume that no balance existed in Wages Payable or Wages Expense on January 1, how much cash was paid as wages during January?

$Answer

d. If the truck has a useful life of five years, what is the monthly amount of depreciation expense and how many months has Parris owned the truck?

$Answer monthly depreciation

Answer months owned the truck

Answer 1

a)	opening + purchases - adjustments = closing balance of supplies
	x +635-2,540 = 950
	x                      = 950+2540-635
		2855	answer
b)	premium = 182*12
		2184	answer
	expired insurance = 2184-910
			1274
			1274/182
			7
	7 months expired
	hence insurance policy start at July 1				answer
c)	Wages paid in cash
	3200-650
	2550	answe
d)	8700/5
	1740
	Depreciation expense = 1740
	2610/1740
	1.5	months owned the truck