Question

In: Accounting

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.)

  1. Paid $6,400 cash in advance on October 1 for a one-year insurance policy.

  2. 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.

  3. Purchased $2,000 of supplies on account. At year’s end, $255 of supplies remained on hand.

  4. 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
Cash + Other Assets 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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