Required Each of the following independent events requires a year-end adjusting entry. Show how each event...

Required

Each of the following independent events requires a year-end adjusting entry. Show how each event and its related adjusting entry affect the accounting equation. Assume a December 31 closing date. The first event is recorded as an example. (Do not round intermediate calculations & Round your final answer to nearest whole dollar.)

Paid $6,400 cash in advance on October 1 for a one-year insurance policy.
Received an $5,200 cash advance for a contract to provide services in the future. The contract required a one-year commitment, starting April 1.
Purchased $2,000 of supplies on account. At year’s end, $255 of supplies remained on hand.
Paid $11,520 cash in advance on August 1 for a one-year lease on office space.

The Accounting Equation
Event/ Adjustment	Total Assets			=	Liabilities	+	Stockholders’ Equity
Event/ Adjustment	Cash	+	Other Assets	=	Liabilities	+	Common Stock	+	Retained Earnings
a.	(6,400)	+	6,400	=		+		+
a. Adj.		+	(1,600)	=		+		+	(1,600)
b.		+		=		+		+
b. Adj.		+		=		+		+
c.		+		=		+		+
c. Adj.		+		=		+		+
d.		+		=		+		+
d. Adj.		+		=		+		+

Solutions

Expert Solution

Solution:

Given below is each event's and its adjusting entry effect's on the Accounting equation:

ekkarill92 answered 1 year ago

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