Question

The following information relates to Susan’s Florist Shop at June 30, 2021, the end of its first year of operations. (All purchases were made for cash unless stated otherwise)

1. On July 2, 2020, Susan purchased equipment for $12,000. The equipment is expected to have a useful life of 8 years. The expected residual value is zero, and Susan will use straight-line depreciation.
2. On August 1, 2020, a one-year insurance policy was purchased for $1,740.
3. In January 2021, a corporate customer paid $2,080 as full payment for a one-year contract for fresh flowers to be delivered to its offices every Monday morning. At June 30^th, 26 of the required 52 deliveries had been completed.
4. On July 2, 2020, Susan purchased enough supplies to last the entire first year of operations for $4,400. At June 30, 2021, Susan counted the supplies on hand and calculated the cost, which amounted to $1,035.
5. Susan pays her store assistant on alternate Fridays. The last pay day in June was June 20^th and the first pay day after year end is July 4^th. The assistant worked 30 hours during this period of which 10 were in June and the rest in July. The assistant earns $11.80 per hour.
6. June 28 is a busy day and Susan has to make deliveries to numerous customers. On July 5, she reviews her June billings, and realizes that she made one large sale for $325 on June 30 for flowers that were delivered, but for which no invoice was issued. The sale was to a regular customer who will pay promptly when the invoice is sent.

Required:

1. For each transaction, prepare any adjusting entries required at June 30, 2021

2. Susan uses reversing entries. Prepare any reversing entries required for July 1, 2021

Answer 1