Question

Question 6 GER Corporation's year end is December 31. Prepare the year-end adjusting entries for each of the following situations: (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) (b) (C) (d) On January 1, GER had $370 of office supplies on hand. During the year, GER purchased an additional $3,740 of office supplies which it recorded as supplies on the balance sheet. A physical inventory on December 31 revealed $280 in office supplies remaining On October 1, GER signed a lease to rent some additional office space. Terms of the one-year lease called for prepayment of the entire year's rent in advance. GER paid $18,000 on October 1 for the full year's rent and recorded a prepaid asset for the entire amount. GER employs five office staff who each earn $41,500 per year. The employees get paid every two weeks (i.e. ten working days), and their salary is spread over 50 weeks. At December 31, the employees have worked three days for which they haven't been paid GER has not yet received the invoice from the local telephone company for telephone and internet service for the month of December. From January to the end of November GER has paid $8,272 for telephone and internet service. (Use account "Accrued Liabilities".) No. Account Titles and Fxnlanation Debit Credit

Answer 1

a) The office supplies at the beginning of the year were 370 and an additional supply of 3740 was purchased at the end of the year the balance is 280 hence the balance amount of 3830 should be debited to the profit and loss account o the company and the journal entry will be

  Profit and loss account Dr 3830

To office supplies account 3830

b) The amount is assumed to be the same on December 31 at the prepaid asset account and the rent was not transferred

Rent account Dr 4500

To prepaid rent account 4500

if transferred in each month no need the entry

c) it is assumed all the salary entries are been made and the whole amount is accounted in the salary account hence the salary account should be credited to cancel out the wrong debit and accrued salary shall be debited since they have not been paid

Accrued salary account Dr 2490

To salary account 2490

the amount came by the equation 41500*5/(50*10/2)

d) Assuming that telephone charges are fixed the per month cost is calculated to 752(8272/11) hence the accrued liability is 752 or the month of decemeber.

Accrued liability Dr 752

To telephone charges 752