Question

Accounting Question 4 View Policies Current Attempt in Progress Updates sions The ledger of Larkspur, Inc. on July 31, 2022, Includes the selected accounts below before adjusting entries have been prepared ences Debit Credit brations PLUS Sup Investment in Note Receivable Supplies Prepaid Rent Buildings $18.000 23,500 2.800 200,000 Accumulated Depreciation-Buildings Uneared Service Revenue $125,000 11.900 An analysis of the company's accounts shows the following 1 The investment in the notes receivable earns interest at a rate of 6% per year 2 Supplies on hand at the end of the month totaled $15.400 3. The balance in Prepaid Rent represents 4 months of rent costs. 4 Employees were owed $2,800 related to unpaid salaries and wages. 5. Depreciation on buildings is $5,520 per year 6. During the month, the company satisfied obligations worth $4,600 related to the Uneared Services Reve 7. Ungaid maintenance and repairs costs were $2,200 Prepare the adjusting entries at July 31 assuming that adjusting entries are made monthly. If manually.) entry is require "No Entry fe No. Date Account Titles and Explanation Debit 1 July 31 Interest Receivable Interest Revenue 2 y 31 Supplies Expense Supplies 1 31 Rent Expense Prepaid Rent 4 31 Salaries and Wages Expense Salaries and Wages Payable Depreciation Expense 5 3 1 Accumulated Depreciation-Buildings 6 3 1 Unearned Service Revenue Service Revenue 7. 31 Maintenance and Repairs Expense Accounts Payable

Answer 1

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Larkspur Inc.

First we will calculate adjustment amount. Then we will make adjustment entries.

Event	Workings for adjustment entries	Amount $	Note
1	Notes receivable	18,000.00	A
	Interest rate	6%	B
	Annual Interest	1,080.00	C=A*B
	Monthly Interest	90.00	D=C/12
2	Supplies- Opening	23,500.00
	Less: Supplies- closing	15,400.00
	Supplies Expense	8,100.00	E
3	Prepaid Rent	2,800.00	F
	Number of month	4.00	G
	Rent Expense	700.00	H=F/G
5	Annual Depreciation	5,520.00	I
	Monthly Depreciation	460.00	J=I/12

Adjusting Entries
Event	Date	Account	Debit $	Credit $	Note
1	31-Jul	Interest receivable	90.00		See note D
		Interest Revenue		90.00
2	31-Jul	Supplies Expense	8,100.00		See note E
		Supplies		8,100.00
3	31-Jul	Rent Expense	700.00		See note H
		Prepaid Rent		700.00
4	31-Jul	Salaries and Wages Expense	2,800.00
		Salaries and Wages Payable		2,800.00
5	31-Jul	Depreciation Expense	460.00		See note J
		Accumulated Depreciation- Buildings		460.00
6	31-Jul	Unearned Service revenue	4,600.00
		Service Revenue		4,600.00
7	31-Jul	Maintenance and Repairs Expense	2,200.00
		Accounts Payable		2,200.00

Larkspur Inc.

First we will calculate adjustment amount. Then we will make adjustment entries.

Event	Workings for adjustment entries	Amount $	Note
1	Monthly Depreciation	504.00	K
	Quarterly Depreciation	1,512.00	L=K*3
2	Unearned Service revenue- Opening	22,320.00	M
	Service revenue earned	11,160.00	N=M/2
4	Supplies- Opening	5,400.00
	Less: Supplies- closing	1,530.00
	Supplies Expense	3,870.00	O
5	Monthly Insurance	720.00	P
	Quarterly Insurance	2,160.00	Q=P*3

Adjusting Entries
Event	Date	Account	Debit $	Credit $	Note
1	31-Mar	Depreciation Expense	1,512.00		See note L
		Accumulated Depreciation- Equipment		1,512.00
2	31-Mar	Unearned Service revenue	11,160.00
		Service Revenue		11,160.00	See note N
3	31-Mar	Interest Expense	720.00
		Interest Payable		720.00
4	31-Mar	Supplies Expense	3,870.00		See note O
		Supplies		3,870.00
5	31-Mar	Insurance Expense	2,160.00		See note Q
		Prepaid Insurance		2,160.00