Exercise 33 Preparing adjusting entries LO P1 a Depreciation

Exercise 3-3 Preparing adjusting entries LO P1 a. Depreciation on the company\'s equipment for 2017 is computed to be $11,000. b. The Prepaid Insurance account had a $6,000 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of the company\'s insurance policies showed that $1,720 of unexpired insurance coverage remains c. The Office Supplies account had a $550 debit balance on December 31, 2016; and $2,680 of office supplies were purchased pped during the year. The December 31, 2017, physical count showed $649 of supplies available. d. Three-fourths of the work related to $13,000 of cash received in advance was performed this period. e. The Prep paid Insurance account had a $6,000 debit balance at December 31, 2017, before adjusting for the costs of any expired ook Ent Ask rint coverage. An analysis of insurance policies showed that $4,280 of coverage had expired. f Wage expenses of $5,000 have been incurred but are not paid as of December 31, 2017. Prepare adjusting journal entries for the year ended (date of) December 31,2017, for each of these separate situations View transaction list Journal entry worksheet Depreciation on the company\'s equipment for 2017 is computed to be $11,000. Note: Enter debits before credits Prey 1 of 1

Solution

Adjusting Journal entries

Transaction

General Journal

Debit

Credit

a

Depreciation expenses

$      11,000.00

       Accumulated Depreciation

$      11,000.00

(Being Depreciation charged for the year on Equipment)

b

Insurance expenses

$        4,280.00

      Prepaid Insurance

4280

(Insurance expenses booked for the year)

c

Office supplies consumed

$        2,581.00

     Office supplies

$        2,581.00

(Consumption of office supplies debited as expense)

d

Service Revenue

$        9,750.00

          Unearned Revenue

$        9,750.00

(Being revenue earned this year out of advance revenue)

e

Insurance expenses

$        4,280.00

      Prepaid Insurance

$        4,280.00

(Insurance expenses booked for the year, $ 4280 Expired)

f

Wages

$        5,000.00

      Wages payable

$        5,000.00

(Wages to be paid next year booked as a current liability)

Alternatively Transaction (a) May have following Journal entry assuming Depreciation is deducted from value of asset.

Depreciation Expense

$ 11000

        Equipment

$ 11000

(Depreciation charged on Equipment)

	Adjusting Journal entries
Transaction	General Journal	Debit	Credit
a	Depreciation expenses	$      11,000.00
	Accumulated Depreciation		$      11,000.00
	(Being Depreciation charged for the year on Equipment)
b	Insurance expenses	$        4,280.00
	Prepaid Insurance		4280
	(Insurance expenses booked for the year)
c	Office supplies consumed	$        2,581.00
	Office supplies		$        2,581.00
	(Consumption of office supplies debited as expense)
d	Service Revenue	$        9,750.00
	Unearned Revenue		$        9,750.00
	(Being revenue earned this year out of advance revenue)
e	Insurance expenses	$        4,280.00
	Prepaid Insurance		$        4,280.00
	(Insurance expenses booked for the year, $ 4280 Expired)
f	Wages	$        5,000.00
	Wages payable		$        5,000.00
	(Wages to be paid next year booked as a current liability)