P333A similar to Laughter Landscaping has collected the foll

P3-33A (similar to) Laughter Landscaping has collected the following data for the December 31 adjusting entries: Requirements ffecting Laughter Landscapir 1. Journalize the adjusting entry needed on December 31 for each of the items affecting Laughter Landscaping. Assume Laughter records adjusting entries only at the end of the year y payroll is $8,500 for a five- 2. Journalize the subsequent journal entries for adjusting entries a, d, and g Credit PrintDone Each Friday, Laughter pays employees for the current week\'s work. The amount of the weekly payroll is $8,500 for a five-day workweek. This year December 31 falls on a Wednesday. Laughter will pay its employees on January 2 On January 1 of the current year, Laughter purchases an insurance policy that covers two years, $5,500 The beginning balance of Office Supplies was $3,600. During the year, Laughter purchased office supplies for $5,300, and at December 31 the office supplies on hand total $1,800 During December, Laughter designed a landscape plan and the client prepaid $7,000. Laughter recorded this amount as Unearned Revenue. The job will take several months to complete, and Laughter estimates that the company has earned 40% of the total revenue during the current year At December 31, Laughter had earned $2,000 for landscape services completed for Transit Appliances. Transit has stated that it will pay Laughter on January 10 Depreciation for the current year includes Equipment, $3,700; and Trucks, $1,300 Laughter has incurred S900 of interest expense on a $1,100 interest payment due on January 15 a. b. c. d. e. f. g.

Solution

1. Adjusting entries are as prepared below:

2. Subsequent journal entries are as recorded below:

Date	Particulars	L.F	Amount ($)	Amount ($)
a.	Wages Expense		5,100
	Wages Payable (8,500*3/5)			5,100
	(for wages accrued for 3 days)
b.	Insurance Expense		2,750
	Prepaid Insurance (5,500*12/24)			2,750
	(for insurance expensed)
c.	Supplies Expense (3,600+5,300-1,800)		7,100
	Office Supplies			7,100
	(for supplies expensed)
d.	Unearned Revenue		2,800
	Service Revenue (7,000*40%)			2,800
	(For revenue earned)
e.	Account Receivable		2,000
	Service Revenue			2,000
	(For service performed)
f.	Depreciation on Equipment		3,700
	Depreciation - Trucks		1,300
	Accumulated dep- Equipment			3,700
	Accumulated dep-Trucks			1,300
	(for depreciation recorded)
g.	Interest expense		900
	Interest payable			900
	(for interest expensed)