Question

Super E.. Gradable Assignment i Savod Help Save & Ex Chec Exercise 5.1 Calculating adjustments. LO 5-2 1. On June 1, 2019, Cain Company, a new firm, paid $6,580 rent in advance for a seven-month period. The $6,580 was debited to the Prepaid Rent account. 2. On June 1, 2019, the firm bought supplies for $7,650. The $7,650 was debited to the Supplies account. An inventory of supplies at the end of June showed that items costing $3,150 were on hand. 3. On June 1, 2019, the firm bought equipment costing $58,320. The equipment has an expected useful life of 9 years and no salvage value. The firm will use the straight-line method of depreciation. Prepare end-of-June adjusting entries for Cain Company. View transaction list Journal entry worksheet Prepare the adjusting entry for prepaid rent. 2 of 3 < Prev Next > earch 03

Answer 1

WORKING NOTES:
	CALCULATION OF RENT EXPENSES FOR THE YEAR
	Monthly Rent Expenses = $ 6,580 / 7 Month =	$940
	Rent Expenses for the month of June =	$940
	CALCULATION OF SUPPLIES EXPENSES FOR PERIOD
	Supplies purchases	$7,650
	Less: Supplied in hand at year end	$3,150
	Supplies Expenses	$4,500
	CALCULATION OF DEPRECIATION EXPENSES OF THE YEAR
	Purchase value of equipment	$58,320
	Divide by	"/" By
	Usefull life of the equipment	9 Years
	Derpeciation per year	$6,480
	Depreciation for the year end June = $ 6,480 / 12 month =	$540
SOLUTION:
Journal Entries
Transaction	General Journal	Debit	Credit
1	Rent Expenses	$940
	Prepaid Expenses		$940
2	Supplies Expenses	$4,500
	Supplies		$4,500
3	Depreciation Expenses	$540
	Accumulated Depreciation - Equipment		$540