Table 3-2
The unadjusted trial balance of Danvon Collection Services at December 31, 2014 follows. Danvon records payments for insurance, rent and supplies to the expense accounts; and, cash received in advance from customers as revenue.
DebitCredit
Cash$4,800
Accounts receivable10,400
Prepaid insurance
Prepaid rent
Office supplies
Equipment16,500
Accumulated amortization$2,400
Salaries payable
Interest payable
Unearned service revenue600
Note payable8,000
Ted Danvon, capital15,200
Ted Danvon, withdrawals3,000
Service revenue42,500
Salaries expense20,500
Amortization expense
Rent expense16,200
Insurance expense2,200
Office supplies expense600
Interest expense500______
$71,700$71,700
13) Refer to Table 3-2. Given the following information, prepare the necessary adjusting entries at year end, December 31, 2014, for Danvon Collection Services.
a) A count revealed that $100 of office supplies were still on hand at December 31, 2014.
b) The accountant has determined that the prepaid insurance balance at December 31, 2014, should be in the amount of $450.
c) The equipment is amortized at the rate of $200 per month.
d) The accountant has determined that the unearned service revenue balance at December 31, 2014 should be in the amount of $350.
e) Interest of $200 on the note payable has accrued to the end of the year.
f) Salaries accrued at December 31, 2014 amounted to $650.
g) The accountant has determined that the prepaid rent balance at December 31, 2014 should be in the amount of $100.
14) At the end of 2014, Sam Lim had catering supplies on hand in the amount of $9,000. During 2015, the business paid $89,000 for additional catering supplies. At year end, the company's catering supplies on hand totalled $5,000.
Required:
1) The 2015 year-end adjusting journal entry if Sam Lim records cash paid for supplies as an expense.
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2) The 2015 year-end adjusting journal entry if Sam Lim records cash paid for supplies as an asset.
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