Question

Garvey Company's unadjusted trial balance includes the following account balances as of December 31, 2018: Credits Debits $ 69.ee 116, gee 1.329 139,320 8,758 50, 300 279, 280 Cash Accounts Receivable Interest Receivable Supplies Prepaid Insurance Notes Receivable (short-term) Equipment Accumulated Depreciation Accounts Payable Salaries and Wages Payable Deferred Revenue Notes Payable (long-term) Common Stock Retained Earnings Service Revenue Interest Revenue Supplies Expense Repair and Maintenance Expense Rent Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Totals $ 64,899 184,609 21,700 9, 300 87,899 217,200 144,200 48,709 22,800 26,550 17.9ee 3,050 $712,300 $712,300 The following data are available to detern A) Insurance purchased at the beginning of July for $8,750 provided coverage for twelve months (July 2018 through June 2019). The insurance coverage for July through December totaling $4,375 has now been used. B) The company estimates $8,200 in depreciation each year. C) A count showed $86,200 of supplies on hand at the end of the year. D) An additional $270 of interest has been earned but has not yet been uncollected on the outstanding notes receivable. E) Services in the amount of $5.650 were performed for customers who had previously paid in advance. F) Services in the amount of $2.100 were performed; these services have not yet been billed or recorded.

Answer 1

a.)

Transaction General Journal Debit Credit A $ 4,375 Insurance Expense Prepaid Insurance (Being insurance expense recorded for the year) | $ 4,375 B $ 8,200 Depreciation Expense Accumulated Depreciation (Being depreciation expense recorded) $ 8,200 C $ 53,100 Supplies Expense Supplies (Being supplies expense recorded) $ 53,100 $ 270 Interest Revenue Interest Receivable (Being interest revenue recorded) $ 270 $ 5,650 Deferred Revenue Service Revenue (Being deferred revenue now recognised) $ 5,650 F $ 2,100 Accounts Receivable Service Revenue (Being unbilled revenue recorded) $ 2,100

Workings: Supplies Expense = Supplies Opening Balance - Ending Balance = 139,300 - 86,200 = $ 53,100

b.)

Garvey Company Adjusted Trial Balance December 31, 2018 Credit Debit $ 69,030 $1,19,000 $ 1,590 $ 86,200 $ 4,375 $ 50,300 $ 2,79,200 Cash Accounts Receivable Interest Receivable Supplies Prepaid Insurance Notes Receivable(short-term) Equipment Accumulated Depreciation Accounts Payable Salaries and Wages Payable Deferred Revenue Notes Payable(long-term) Common Stock Retained Earnings Service Revenue Interest Revenue Supplies Expense Repairs and Maintenance Expense Rent Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Totals $ 73,000 $1,04,600 $ 21,700 $ 3,650 $ 87,800 $ 2,17,200 $1,44,200 $ 48,450 $ 22,270 $ 53,100 $ 26,550 $ 17,900 $ 8,200 $ 4,375 $ 3,050 $7,22,870 $ 7,22,870