Question

Answer the following questions, assuming the year begins January 1. (a) If the amount in Supplies Expense is the January 31 adjusting entry, and $850 of supplies was purchased in January, what was the balance in Supplies on January 1? (b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for one year, what was the total premium and when was the policy purchased? (c) If $2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2019? (d) If $1,600 was received in January for services performed in January, what was the balance in Unearned Service Revenue at December 31, 2019?

Answer 1

Answer:

A. $800

B. $4,800

August 1, 2019

C.$3,300

$1,500

Explanation:

(a) Calculation for what was the balance in Supplies on January 1

Balance in Supplies on January 1=$950 + $700 - $850

Balance in Supplies on January 1=$800

(b) Calculation for what was the total premium and when was the policy purchased

Total premium=($400 x 12 months)

Total premium= $4,800

Calculation for when was the policy purchased

Prepaid Insurance, 1/31 $2,400

Monthly premium $400

Number of months remaining 6

($2,400/$400)

Hence, The Policy was purchase on August 1, 2019

(c) Salary and Wages Payable at Decemeber 31, 2019 $1,500

Cash Paid $2,500

Salaries and wages payable, 1/31 $800

$3,300

Less: Salaries and wages expense $1,800

Salaries and wages payable, 12/31/19 $1,500