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Mobile App Chapter 3: 3-23E (page 163)
Question :Consider the following situations for Betterton Welding Services: a. Depreciation for the current year includes equipment, \(2,100. b. Each Monday, Betterton pays employees for the previous week’s work. The amount of weekly payroll is \)1,400 for a seven-day workweek (Monday to Sunday). This year, December 31 falls on Thursday. Learning Objective 3 Learning Objective 3 Learning Objective 3 Learning Objective 3 Beginning Prepaid Rent Payments for Prepaid Rent during the year Total amount to account for Subtract: Ending Prepaid Rent Rent Expense Situation A B C D \(1,400 700 2,100 800 \) a \(1,000 1,600 700 \)900 b \( 200 1,800 \)1,900 c d \( 700 600 \)1,000 f e CHAPTER 3 164 chapter 3 c. The beginning balance of Office Supplies was \(2,300. During the year, Betterton purchased office supplies for \)3,000, and at December 31 the office supplies on hand totaled \(1,000. d. Betterton prepaid a two full years’ insurance on July 1 of the current year, \)6,000. Record insurance expense for the year ended December 31. e. Betterton had earned \(2,800 of unearned revenue. f. Betterton had incurred (but not recorded) \)200 of interest expense on a note payable. The interest will not be paid until February 28. g. Betterton billed customers $3,000 for welding services performed. Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries
Short Answer
Adjusting entries are as follows:
Transactions | Accounts and Explanation | Debit | Credit |
(a) | Depreciation Expense—Equipment | $2,100 | |
Accumulated Depreciation—Equipment | $2,100 | ||
To record depreciation on equipment | |||
(b) | Salaries Expense | $800 | |
Salaries Payable | $800 | ||
To record accrued salaries expense | |||
(c) | Supplies Expense | $4,300 | |
Office Supplies | $4,300 | ||
To record office supplies used | |||
(d) | Insurance Expense | $1,500 | |
Prepaid Rent | $1,500 | ||
To record insurance expense | |||
(e) | Unearned Revenue | $2,800 | |
Service Revenue | $2,800 | ||
To record service revenue earned | |||
(f) | Interest Expense | $200 | |
Interest Payable | $200 | ||
To record accrued interest expense | |||
(g) | Accounts Receivable | $3,000 | |
Service Revenue | $3,000 | ||
To record service revenue earned |
Step by step solution
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