ab Merchandise Inventory before adjustment has a balance of

a.-b. Merchandise Inventory, before adjustment, has a balance of $7,900. The newly counted inventory balance is $8,400. Unearned Seminar Fees has a balance of $6,400, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019. Prepaid Insurance has a balance of $14,400 for six months’ insurance paid in advance on May 1, 2019. Store equipment costing $5,820 was purchased on March 31, 2019. It has a salvage value of $540 and a useful life of four years. Employees have earned $290 that has not been paid at June 30, 2019. The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $8.70; FUTA, $1.74; Medicare, $4.21; and social security, $17.98. Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were $2,400,000. Prepaid Rent has a balance of $7,200 for six months’ rent paid in advance on March 1, 2019. The Supplies account in the general ledger has a balance of $440. A count of supplies on hand at June 30, 2019, indicated $170 of supplies remain. The company borrowed $7,700 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 12 percent. Required: Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end. Analyze: After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?

Solution

Trans Accounts Title Dr Cr a Inventory $500 Cost of Good sold $500 b Unearned Seminar fees 2560 Fees Earned (6400/5*2) 2560 c Insurance expenses $4,800 Prepaid Insurance (14400/6*2) $4,800 d Depreciation expenses 330 Accumulated Depreciation-Store equipment $330 (5820-540)/4*3/12 e Payroll Tax expenses $32.63 Social security taxes payable $17.98 Medicare taxes payable 4.21 Federal Unemployment Taxes payable 1.74 State Unemployment Taxes payable $8.7 f Bad Debt expenses 2400 Allowance for Uncollectible Accounts 2400 g Rent expenses 4800 Prepaid Rent (7200/6*4) 4800 h Supplies expenses 270 Supplies (440-170) 270 i Interest expenses 77 Interest Payable (7700*12%1/12) 77 Balance of prepaid rent 7200-4800 2400 If any doubt please comment. If satisfied you can rate\'