Question

a.-b. Merchandise Inventory, before adjustment, has a balance of $6,500. The newly counted inventory balance is $7,000.

Unearned Seminar Fees has a balance of $5,000, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019.

Prepaid Insurance has a balance of $6,000 for six months’ insurance paid in advance on May 1, 2019.

Store equipment costing $19,840 was purchased on March 31, 2019. It has a salvage value of $400 and a useful life of six years.

Employees have earned $150 that has not been paid at June 30, 2019.

The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $4.50; FUTA, $0.90; Medicare, $2.18; and social security, $9.30.

Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were $1,000,000.

Prepaid Rent has a balance of $5,100 for six months’ rent paid in advance on March 1, 2019.

The Supplies account in the general ledger has a balance of $300. A count of supplies on hand at June 30, 2019, indicated $100 of supplies remain.

The company borrowed $10,600 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 6 percent.

Required:
Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end.

Analyze:
After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rentaccount?

Based on the above information, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end. (Round your final answers to 2 decimal places.)

JOURNAL ENTRY WORKSHEET

Record the adjustment for beginning inventory.

Record the adjustment for ending inventory.

Record the adjustment for seminar fees earned.

Record the adjustment for insurance expired.

Record the adjustment for depreciation.

Record the adjustment for wages owed.

Record the adjustment for payroll taxes owed.

Record the adjustment for uncollectible accounts.

Record the adjustment for rent.

Record the adjustment for supplies used.

Record the adjustment for interest.

After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?

Prepaid rent, June 30, 2019= ??????

Answer 1

Journal enrties in books will be as follows:

A)Begning Inventory : Trading A/c Dr. $6.500

ToOpening Stock A/c $6.500

B) Closing Inventory :Closing Stock A/c $7,000

To Trading A/c $7,000

C) Seminar fees earned: Unearned Seminar fees A/c Dr. $2,000

To Seminar Fees Earned A/c $2,000

(5000*2/5=2000)

D) Insurance Expired: Insurance Expense A/c Dr $2,000

To Prepaid Insurance A/c $2,000

(6,000*2/6= 2000)

E) Depriciation on Store Equipment: Depriciation A/c Dr $810

To Store Equipment A/c $810

[(19840-400/6)*3/12]

F) Unpaid Wages: Wages A/c Dr $150

To Accrued Wages A/c $150

G) Unpaid Payroll Taxes: FUTA Expense A/c Dr. $0.90

SUTA Expense A/c Dr. S4.50

Medicare Payable A/c Dr. $2.18

Social Security Payable A/c Dr $9.30

To Payroll Taxes Payable A/c $16.88

H) Bad debts: Bad Debts A/c Dr $10,000

To Allowance for Doubtful Debts A/c $10,000

I) Prepaid Rent expired: Rent A/c Dr. $3,400

To Prepaid Rent A/c $3,400

J) Supplies Used: Supplies Expense A/c Dr. $200

To Supplies A/c $200

i) Interest: Interest Expense A/c Dr $159

Interest Payable A/c $159

(10,600*6%*1/4= 159)

Balance of Prepaid Rent A/c is =$5,100-$3,400 = $1,700

Calculation of prepaid rent expired = 5100*4/6 = 3400 (Four months from March, 2019 to Jun, 2019)