MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION Exercise 3

MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION Exercise 3-11 A partial adjusted trial balance of Gehring Company at January 31, 2017, shows the following GEHRING COMPANY Adjusted Trial Balance anuary 31, 2017 Debit Credit Supplies Prepaid Insurance Salaries and Wages Payable Unearned Service Revenue Supplies Expense Insurance Expense Salaries and Wages Expense Service Revenue $900 2,400 900 750 800 400 2,700 2,500 Answer the following questions, assuming the year begins January 1 If the amount in Supplies Expense is the January 31 adjusting entry, and $1.100 of supplies was purchated in January, what was the balance in Supplies on January 17 Supplies balance 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 purchased? polil Total nremium

Solution

a. January 1 balance in Supplies account = 900 + 800 - 1100 = $600

b. Total Premium = 400*12 = $4,800
?Half of the premium has been written off as on 31st January. This means policy was purchased 6 months back on 1st August, 2016

c. Salaries and wages payable = 3500 - (2700 - 900) = $1,700