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Analyzing Accounts Using Adjusted Data Selected T-account balances for Fields Company are shown below as of...

Analyzing Accounts Using Adjusted Data
Selected T-account balances for Fields Company are shown below as of January 31, 2014; adjusting entries have already been posted. The firm uses a calendar-year accounting period but prepares monthly adjustments.

Supplies (A)
Jan.31 Bal 6,400
Supplies Expense (E)
Jan.31 Bal 7,680
Prepaid Insurance (A)
Jan.31 Bal 4,592
Insurance Expense (E)
Jan.31 Bal 656
Wages Payable (L)
Jan.31 Bal 4000
Wages Expense (E)
Jan.31 Bal 25,600


Truck (A)
Jan.31 Bal 69,600
Accumulated Depreciation-Truck (XA)
Jan.31 Bal 23,200

(a) If the amount in Supplies Expense represents the January 31 adjustment for the supplies used in January, and $4,960 worth of supplies were purchased during January, what was the January 1 beginning 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

May 1, 2013

June 1, 2013

July 1, 2013

August 1, 2013

September 1, 2013

October 1, 2013

November 1, 2013



(c) If we assume that no beginning 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?
$Answer

How many months has Fields owned the truck?
Answer

Solutions

Expert Solution

Req a:
Answer is $ 9120
Explanation:
Consumed Supplies 7680
Add: Ending supplies 6400
Total supplies 14080
Less: Purchases 4960
Beginning balance of supplies 9120
Req b:
Answer is Sep1 2013 , Annual premium is $ 7872
Explanation:
Monthly Insurance expense 656
Unexired Insurance 4592
Unexired months 7
Expired month before Jan31 5
Therefore Insurance Starts on Sep 12013
Amount of premium (656*12) 7872
Reqc:
Answer is $ 21600
Explanation:
Total wage expnse 25600
Less: payable at the end 4000
Wages expense paid 21600
Req d:
Answer is $ 1160
Explanation :
Cost of Truck 69600
Life of Truck in months 60
Monthly depreciation expense 1160
Req e:
Answer is 20 months
Explanation:
Balance in Accumulated dep 23200
Divide: Monthyl dep expense 1160
Number of months truck owned 20

ekkarill92 answered 1 year ago
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