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Ben Cartwright Pest Control has the following balances in selected accounts on December 31, 2014. Accounts...

Ben Cartwright Pest Control has the following balances in selected accounts on December 31, 2014.


Accounts Receivable € 0
Accumulated Depreciation – Equipment 0
Equipment 6,650
Interest Payable 0
Notes Payable 20,000
Prepaid Insurance 3,000
Salaries and Wages Payable 0
Supplies 2,940
Unearned Service Revenue 36,000

All of the accounts have normal balances. The information below has been gathered at December 31, 2014.
1. Depreciation on the equipment for 2014 is €1,250.
2. Ben Cartwright Pest Control borrowed €20,000 by signing a 6%, one-year note on July 1, 2014.
3. Ben Cartwright Pest Control paid €3,000 for 12 months of insurance coverage on October 1, 2014.
4. Ben Cartwright Pest Control pays its employees total salaries of €10,000 every Monday for the preceding 5-day week (Monday-Friday). On Monday, December 27, 2014, employees were paid for the week ending December 24, 2014. All employees worked the five days ending December 31, 2014.
5. Ben Cartwright Pest Control performed disinfecting services for a client in December 2014. The client will be billed €3,000.
6. On December 1, 2014, Ben Cartwright Pest Control collected €36,000 for disinfecting processes to be performed from December 1, 2014, through May 31, 2015.
7. A count of supplies on December 31, 2014, indicates that supplies of €750 are on hand.

Instructions
Prepare in journal form with explanations, the adjusting entries for the seven items listed for Ben Cartwright Pest Control.

Solutions

Expert Solution

Account Titles Debit Credit
Depreciation Expense €      1,250.00
        Accumulated Depreciation – Equipment €      1,250.00
(Depreciation Expense expense for the period)
Interest Expense €         600.00 =20000*6%*6/12
       Interest Payable     €         600.00
(Interest accrued for 6 months)
Insurance Expense €         750.00 =3000/12*3
       Prepaid Insurance €         750.00
(Prepaid insurance expired for 3 months)
Salaries Expense €    10,000.00
       Salaries Payable €    10,000.00
(Salaries accrued for 5 days)
Accounts Receivable €      3,000.00
       Service Revenue €      3,000.00
(Recognized service revenue for services)
Unearned Service Revenue €      6,000.00 =36000/6
       Service Revenue €      6,000.00
(Recognized service revenue for services)
Supplies Expense €      2,190.00 =2940-750
        Supplies €      2,190.00
(Supplies consumed during the period)

ekkarill92 answered 2 years ago
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