Question

Supplies on hand at October 31 total $500. Expired insurance for the month is $100. Depreciation for the month is $50. Services related to unearned service revenue in October worth $600 were performed. Services performed but not recorded at October 31 are $300. Interest accrued at October 31 is $95. Accrued salaries at October 31 are $1, 625. Instructions Prepare the adjusting entries for the items above.

Answer 1

Answer:

Supplies on hand at October 31 total $500

Inventory $ 500 (debit)

Income Statement - cost of sales $500 (debit)

Expired insurance for the month is $100

Insurance $ 100 (debit)

Account Payable - Insurance Provider $100(credit)

Depreciation for the month is $50

Depreciation $50 (debit)

Accumulated Depreciation / Asset $50 (credit)

Services related to unearned service revenue in October worth $600 were performed

Trade Receivable $ 600 (debit)

Revenue $ 600 (credit)

Interest accrued at October 31 is $95

Interest expense $95 (debit)

Interest Accrued $95 (credit)

Accrued salaries at October 31 are $1, 625

Salaries and Wages $ 1625

Salaries and Wages Accrued $ 1625

Explanation:

Supplies on hand at October 31 total $500

Recognise an Asset - Inventory and de-recognise an expense - cost of sales in Income statement

Expired insurance for the month is $100

Recognise an expense - Insurance and recognise a liablility - Trade Payable (Insurance Provider)

Depreciation for the month is $50

Recognise an expense - depreciation and de-recognise an asset through the accumulated depreciation account

Services related to unearned service revenue in October worth $600 were performed

Recognise an Asset- Trade Receivable and recognise revenue

Interest accrued at October 31 is $95

Recognise an expense - Interest and a liability - Interest accrued

Accrued salaries at October 31 are $1, 625

Recognise an expense - Salaries and Wages and de-recignise a liability - Salaries and Wages accrued.