Question

Question 12

Trotman’s variety Store is completing the accounting process for the current year just ended. December 31. The transaction during the year have been journalized and posted. The following data will respect to adjustment entries are available.

a. Wages earned by employees during December, unpaid and unrecorded at December 3, amount to $2,700 the last payroll was December 28, the next payroll will be January 6.

b. Office supplies on hand at January 1 of the current year totaled $450.00. Office supplies purchased and debited to office supplies during the year amounted to $500. The year-end count showed $275 of supplies on hand.

C. One-fourth of the basement space rented to Kathy’s Specialty Shop for $560 per month, payable monthly. At the of the current year. The rent for November and December had not been collected or recorded. Collection is expected in January of the next year.

d. The store used delivery equipment all year that cost $60,500, $12,100 was the estimated annual depreciate.

e. On July 1 of the current year, a two-year insurance premium amounting to $2,400 was paid in cash and debited in full to prepaid insurance coverage began July 1 of the current year.

f. the remaining basement of the store is rented for $1600 per month to another merchant. M Carlos. Inc Carlos sell compatible merchandise. on November 1 of the current year. The store collected six months rent in the amount of $9,600 in advance from Carlos; it was credited in full unearned rent revenue when collected.

g. Trotman variety store operates a repair shop to meet its own needs, the shop also does repairs for M. Carlos. At the end of the current. Carlos had not paid $800 for completed repairs. this amount has not yet been recorded as repair shop revenue, collection is expected during January of next year.

Required Information

1. Identify each of the transaction as differed expense, accrued revenue, or accrued expense.

2. Prepare the adjusting entries that should be recorded for Trotman’s Varity Store at December 31 of the current year. (if no entry is required for a transaction/event, select “No journal entry required” in the first account field.)

View Transaction List

Journal Entry Worksheet

Wages earned by employees during December, unpaid and unrecorded at December 31 amount to $2700. The last payroll was December 28; the next payroll will be January 6

Answer 1

a. Wages earned by employees during December, unpaid and unrecorded at December 3, amount to $2,700 the last payroll was December 28, the next payroll will be January 6.
1. Accrued expense
2. Adjusting entry:	31st Dec	Wages expense
		To Wages payable
		(Being the entry for recording the accured wages earned by employees for Dec 29, 30 & 31st)
b. Office supplies on hand at January 1 of the current year totaled $450.00. Office supplies purchased and debited to office supplies during the year amounted to $500. The year-end count showed $275 of supplies on hand.
1. Neither accrued nor deferred expense
2. Adjusting entry:	31st Dec	Office supplies Expense
		To Office supplies (450+500-275)
		(Being the entry for office supplies consumed during the year)
C. One-fourth of the basement space rented to Kathy’s Specialty Shop for $560 per month, payable monthly. At the of the current year. The rent for November and December had not been collected or recorded. Collection is expected in January of the next year.
1. Accrued Revenue	31st Dec	Kathys specialty shop
2. Adjusting entry:		To Rental Income
		(Being the entry for rental income receivable for Nov and Dec months from Kathys specialty shop)
d. The store used delivery equipment all year that cost $60,500, $12,100 was the estimated annual depreciate.
Deferred expense or capital expenditure	31st Dec	Depreciation expense
2. Adjusting entry:		To Accumulated depreciation/Equipment
		(Entry for depreciation for the year)
e. On July 1 of the current year, a two-year insurance premium amounting to $2,400 was paid in cash and debited in full to prepaid insurance coverage began July 1 of the current year.
1. Deferred expense	31st Dec	Insurance expense
2. Adjusting entry:		To Prepaid Insurance
		(Entry for recording the insurance expense from July 1 to the end of year: 2400*0.5/2 )
f. the remaining basement of the store is rented for $1600 per month to another merchant. M Carlos. Inc Carlos sell compatible merchandise. on November 1 of the current year. The store collected six months rent in the amount of $9,600 in advance from Carlos; it was credited in full unearned rent revenue when collected.
1. Accrued Revenue	31st Dec	Unearned rent revenue
2. Adjusting entry:		To Rental Income
		(Being the entry for earned rental income for Nov and Dec months from M Carlos)
g. Trotman variety store operates a repair shop to meet its own needs, the shop also does repairs for M. Carlos. At the end of the current. Carlos had not paid $800 for completed repairs. this amount has not yet been recorded as repair shop revenue, collection is expected during January of next year.
1. Accrued Revenue	31st Dec	M Carlos
2. Adjusting entry:		To Repair shop revenue
		(Being the entry for recording repair shop income receivable from M Carlos)