eztomheducationcom ACCT 201 Reveliw Question 13 of 15 200 po

ezto.mheducation.com ACCT 201 Reveliw Question 13 (of 15) 2.00 points Ricardo Construction began operations on December 1. In setting up its accounting procedures, the company decided to debit expense accounts when it prepays its expenses and to credit revenue accounts when customers pay for services in advance. Prepare journal entries for items a through d and the adjusting entries as of its December 31 period-end for items e through g. a. Supplies are purchased on December 1 for $2,600 cash. b. The company prepaid its insurance premiums for $1,840 cash on December 2 c. On Deoember 15, the company receives an advance payment of $19,000 cash from a customer for remodeling work. d. On December 28, the company receives $4,300 cash from another customer for remodeling work to be performed in January e. A physical count on December 31 indicates that the Company has $1,900 of supplies available. f. An analysis of the insurance policies in effect on December 31 shows that $400 of insurance coverage had expired 9. As of December 31, only one remodeling project has been worked on and completed. The $5,630 fee for this project had been received in advance View transaction list Journal entry worksheet Supplies are purchased on December 1 for $2,600 cash. Note: Enter debits before credits. Dec 01

Solution

Date Account Titles and Explanations Debit $ Credit $ a. Dec. 1 Supplies Expense 2,600 Cash    2,600 Purchased supplies b. Dec. 2 Insurance Expense 1,840 Cash    1,840 Paid insurance premiums c. Dec. 15 Cash 19,000 Remodeling Fees Earned 19,000 Received fees for work to be done d. Dec. 28 Cash 4,300 Remodeling Fees Earned 4,300 Received fees for work to be done e. Dec. 31 Supplies     1,900 Supplies Expense 1,900 Adjust expenses for unused supplies f. Dec. 31 Prepaid Insurance ($1,840 - $400) 1,440 Insurance Expense 1,440 Adjust expenses for unexpired coverage g. Dec. 31 Remodeling Fees Earned 17,670 Unearned Remodeling Fees 17,670 Adjusted revenues for unfinished projects ($19,000 + 4,300 - $5,630).