Question

Golden Eagle Company prepares monthly financial statements for its bank. The November 30 and December 31 adjusted trial balances include the following account information:
30-Nov 31-Dec
debit credit debit credit
supplies $ 2,000 $ 3,500
prepaid Insurance $ 8,000 $ 6,000
salaries payable $ 11,000 $ 16,000
unearned revenue $ 3,000 $ 1,500

The following information also is known:
(1) Purchases of supplies during December total $4,200.
(2) Supplies on hand at the end of December equal $3,350.
(3) No insurance payments are made in December. Insurance cost is $1,850 per month.
(4) November salaries payable of $10,700 were paid to employees in December.
(5) Additional salaries for December owed at the end of the year are $15,700.

Required:

Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31.

Answer 1

Answer:

Explanation:

We solve by taken into consideration the transaction on a,b,c and d. This will allow us to get the unadjusted ending balance of each account we then compare it to be the adjusted balance on december 31 to find the adjustments made.

a) For supplies account:

supplies, November 30                                                           $2,000

purchase of additional supply doing December                      4,500

                                                                                                   -----------

supplies, December 31(unadjusted)                                       $6,500

Adjustment squeeze                                                                  3,000

                                                                                                  -------------

supllies december 31                                                                 3,500

The adjustment is squeeze meaning it was used as force balancing. Adjustmnet include a debit to supplies,expense and credit to supplies for $3,000                    

b) For supplies account:

Prepaid, Insurance November 30                                           $8,000

Additional insurance payment doing December                             0

                                                                                                   -----------

Prepaid insurance , December 31 (unadjusted)                      $8,000                

Adjustment squeeze                                                                   2,000

                                                                                                  -------------

Prepaid insurance december 31 (adjusted )                              6,000

The adjustment is squeeze meaning it was used as force balancing. Adjustmnet include a debit to insurance expense and credit to prepaid insurance for $2,000          

c) For supplies account:

salary payable November 30                                                  $11,000

salary paid doing December                                                      11,000

                                                                                                   -----------

Salary payable , December 31 (unadjusted)                                      0                

Adjustment squeeze                                                                  16,000

                                                                                                  -------------

Prepaid insurance december 31 (adjusted )                             $16,000

The adjustment is squeeze meaning it was used as force balancing. Adjustmnet include a debit to salary which represent unpaidupaid salary payable $16,000                              

d) For supplies account:

Deffered revenue November 30                                                          $3,000

Additiona Advances from customer in december                                         0                                    

                                                                                                                -----------

Refered revenue , December 31 (unadjusted)                                      3,000                

Adjustment squeeze                                                                               1,500

                                                                                                              -------------

refered revenue december 31 (adjusted )                                            $1,500

The adjustment is squeeze meaning it was used as force balancing. Adjustmnet include a debit to defred revenue and a credit to service revenue for $1,500 .