Question

A partial adjusted trial balance of Sheffield Corp. at January 31, 2019, shows the following. Sheffield Corp. Adjusted Trial Balance January 31, 2019 Debit $ 900 2,400 $ 800 850 Supplies Prepaid Insurance Salaries and Wages Payable Unearned Service Revenue Supplies Expense Insurance Expense Salaries and Wages Expense Service Revenue 900 400 3,000 2,000 Answer the following questions, assuming the year begins January 1. If the amount in Supplies Expense is the January 31 adjusting entry and $1,200 of supplies was purchased in January, what was the balance in Supplies on January 1? Supplies balance (b) If the amount in Insurance Expense is the January 31 adjusting entry and the original insurance premium was for one year, what was the total premium and when was the policy purchased? Total premium Purchase date (c) If $3,200 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2018? Salaries and wages payable

Answer 1

Ans a	Ending Supplies= Beginning Supplies + Purchase - Supplies Expense
	Beginning Supplies = Ending Supplies - Purchase + Supplies Expense
	Beginning Supplies = $900 - $1200 + $900
	Beginning Supplies = $600
Ans b	Insurance Expense for January Month $400
	Insurance period is 12 month i.e. one year
	Total Premium = 12 x $400 = $4800
	Prepaid insurance as on 31 Jan $2400
	Remaining period = $2400/400 = 6 months
	The purchase date will be 6 months back from 31 Jan 2019 i.e. 1st August 2018
Ans c	Ending Salaries and Wages Payable = Beginning Salaries and Wages Payable + Salaries and Wages Expense - salaries paid
	Beginning Salaries and Wages Payable = Ending Salaries and Wages Payable - Salaries and Wages Expense + salaries paid
	Beginning Salaries and Wages Payable = $800 - $3000 + $3200
	Beginning Salaries and Wages Payable = $800 - $3000 + $3200
	Beginning Salaries and Wages Payable = $1000