Question

Exercise 22-19 A partial trial balance of Crane Corporation is as follows on December 31, 2018. Dr. Cr. Supplies $2,600 Salaries and wages payable $1,500 Interest Receivable 4,600 Prepaid Insurance 86,200 Unearned Rent 0 Interest Payable 14,100 Additional adjusting data: 1. A physical count of supplies on hand on December 31, 2018, totaled $1,100. 2. Through oversight, the Salaries and Wages Payable account was not changed during 2018. Accrued salaries and wages on December 31, 2018, amounted to $4,700. 3. The Interest Receivable account was also left unchanged during 2018. Accrued interest on investments amounts to $3,700 on December 31, 2018. 4. The unexpired portions of the insurance policies totaled $68,300 as of December 31, 2018. 5. $26,500 was received on January 1, 2018, for the rent of a building for both 2018 and 2019. The entire amount was credited to rent revenue. 6. Depreciation on equipment for the year was erroneously recorded as $5,200 rather than the correct figure of $52,000. 7. A further review of depreciation calculations of prior years revealed that equipment depreciation of $7,500 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment. Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2018? (Ignore income tax considerations.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. 7. SHOW LIST OF ACCOUNTS Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2018? (Ignore income tax considerations.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. 7. SHOW LIST OF ACCOUNTS Pass the necessary adjusting entries for the following taking into account income tax effects (40% tax rate) and assuming that the books have been closed. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) 1. Depreciation on equipment for the year was erroneously recorded as $5,200 rather than the correct figure of $52,000. 2. A further review of depreciation calculations of prior years revealed that equipment depreciation of $7,500 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment. No. Account Titles and Explanation Debit Credit 1. 2.

Answer 1

S.no	Particulars	Debit	Credit
1.	Supplies Expense($2600-$1100)	$1,500
	Supplies		$1,500
	(To record the supplies expense)
2.	Salaries and Wages Expense($4,700-$1500)	$2,200
	Salaries and Wages Payable		$2,200
	(To record the accrued salaries)
3.	Interest Revenve($4,600-$3,700)	$900
	Interest Receivable		$900
	(To record the accrued interest revenue)
4.	Insurance Expense($86,200-$68,300)	$17,900
	Prepaid Insurance		$17,900
	(To record the insurance expense)
5.	Rent Revenue($26,500/2)	$13,250
	Unearned Rent Revenue		$13,250
	(To record the unearned revenue)
6.	Depreciation Expense($52000-$5200)	$ 46,800
	Accumulated Depreciation-Equipment		$46,800
	(To record the correct depreciation)
7.	Retained Earnings	$7,500
	Accumulated Depreciation- Equipment		$7,500
	(To record the prior years depreciation)