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Spicecherry · May 7, 2009, 07:35 PM

Prepare adjusting entries for the year ended December 31, 2007, based on the following data:

a. A two-year insurance policy costing $3,000 was purchased on September 30, 2007.

b. Employee salaries are owed for 3 days of a regular 5-day work week. Weekly payroll, $8,000.

c. The balance in Supplies before adjustment is $1,600. A physical count reveals $350 of supplies on hand on December 31, 2007.

d. Equipment was purchased at the beginning of the year for $20,000. The equipment has a useful life of 4 years and no salvage value.

e. Unearned Service Revenue has a balance of $4,200 before adjustment. Records show that $2,725 of that amount has been earned by December 31, 2007.

pready · May 10, 2009, 10:11 AM

a. 3 months of prepaid insurance has been used. Accounts are Prepaid Insurance and Insurance Expense

b. 3/5 of payroll is salaries expense and Salaries Payable

c. amount of supplies used. Accounts are Supplies and Supplies Expense

d. Need to compute Depreciation Expense. Accounts are Depreciation Expense and Accumulated Depreciation

e. Accounts are Unearned Revenue and Earned Revenue.