Question

The Righter Shoe Store Company prepares monthly financial statements for its bank. The November 30 and December 31, 2021, trial balances contained the following account information:

	Nov. 30			Dec. 31
	Dr.	Cr.		Dr.	Cr.
Supplies	1,600			3,100
Prepaid insurance	6,100			4,550
Salaries payable		10,500			15,100
Deferred rent revenue		2,200			1,100

The following information also is known:

1. The December income statement reported $2,100 in supplies expense.
2. No insurance payments were made in December.
3. $10,500 was paid to employees during December for salaries.
4. On November 1, 2021, a tenant paid Righter $3,300 in advance rent for the period November through January. Deferred rent revenue was credited.

Required:
1. Using the above information for December, complete the T-accounts below. The beginning balances should be the balances as of November 30.
2. Using the above information, prepare the adjusting entries Righter recorded for the month of December.

Answer 1

Supplies
Nov 30 - Opening Balance	$             1,600.00	Dec - Supplies expenses	$       2,100.00
		Dec 31 - Closing Balance	$       3,100.00
Dec - Cash(B/f)(Supplies Purchased)	$             3,600.00
	$             5,200.00		$       5,200.00
Prepaid Insurance
Nov 30 - Opening Balance	$             6,100.00	Dec - Insurance expenses(B/f)	$       1,550.00
		Dec 31 - Closing Balance	$       4,550.00
	$             6,100.00		$       6,100.00
Salaries Payable
Dec - Cash	$           10,500.00	Nov 30 - Opening Balance	$     10,500.00
		Dec - Salaries expense(Acrrued salary)	$     15,100.00
Dec 31 - Closing Balance	$           15,100.00
	$           25,600.00		$     25,600.00
Deferred Rent Revenue
Dec - Rent Revenue	$             1,100.00	Nov 30 - Opening Balance	$       2,200.00
Dec 31 - Closing Balance	$             1,100.00
	$             2,200.00		$       2,200.00
	Date	Accounts & Explanation	Debit	Credit
	Dec-31	Supplies	$       3,600.00
		Cash		$     3,600.00
	Dec-31	Insurance expenses	$       1,550.00
		Prepaid Insurance		$     1,550.00
	Dec-31	Salaries expenses	$     15,100.00
		Salaries payable		$   15,100.00
	Dec-31	Unearned Rent Revenue	$       1,100.00
		Rent Revenue		$     1,100.00