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Using the partial Unadjusted Trial Balance at yearend June 30, 2020 below prepare the annual adjusting...

Using the partial Unadjusted Trial Balance at yearend June 30, 2020 below prepare the annual adjusting journal entries in proper general journal form for the below transactions and answer additional questions. Please record all your answers in the journal entry table provided.

Account Title   Dr. $   Cr. $
Prepaid Insurance   24,000.00     
Notes Receivable    5,500.00     
Shop Supplies   2,700.00     
Delivery Vehicle   40,000.00     
Accumulated Depreciation - Delivery Vehicle      0.00
Unearned Service Revenue      10,000.00
Notes Payable        5,000.00

a) January 1, 2020 a new delivery vehicle was purchased for $40,000. The delivery vehicle has an estimated salvage value of $4,000 and has a estimated useful life of 5 years. Record the depreciation.

b) Accrued revenues at year end totalled $4,200.

c) Employees are paid bi-weekly on Fridays. The total biweekly wage expense for all employees is $10,000. The last pay day was Friday, June 26, 2020 for work to the end of June 26, 2020. Employees do not work weekends.
d)The Notes Payable represents a loan received on April 1, 2020. Interest is accrued at 3% per year. Both the interest and principal are payable on March 31, 2020.

e) At year end it was determined that $1,000 of the Shop Supplies had been used. What is the adjusted ending balance in the Shop Supplies account at year end. Please state whether it will be a debit or credit balance.

Solutions

Expert Solution

Adjusting entries
S.no. Accounts title and explanations Debit $ Credit $
a. Depreciation expense (36000*6/60) 3600
   Accumulated dep-Vehicle 3600
(for depreciation charged)
b. Accounts receivable 4200
     Service revenue 4200
(for revenue earned nt received)
c. Salaries and wages expense (10000*2/10) 2000
     Salaries and wages payable 2000
(for salaries accrued)
d. Interest expense (5000*3%*3/12) 37.5
     Interest payable 37.5
(for interest accrued)
e. Shop supplies expenses 1000
    Shop Supplies 1000
(for supplies used)
Adjusting Ending balance of Shop Supplies account (2700-1000): 1700 debit

ekkarill92 answered 2 years ago
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