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  • Jun 21, 2013, 07:44 PM
    Whitesand
    Analyze Adjusted Data
    I want to check if my answers to the following questions are correct. :)

    A partial adjusted trial balance of Safin Company at January 31, 2010

    Dr. Supplies 600
    Dr. Prepaid Insurance 2400
    Cr. Salaries payable 800
    Cr. Unearned Revenue1000
    Dr. Supplies expense950
    Dr. Insurance expense400
    Dr. Salaries expense1800
    Cr. Service revenue3000

    Questions:
    1. If the amount in Supplies Expense is the Jan 31 adjusting entry, and $650 of supplies was purchased in January, what was the balance in supplies on January 1?
    2. If the amount in Insurance Expense is the Jan 31 adjusting entry, and the original insurance premium was for one year, what was the total premium and when was the policy purchased?
    3. If $2500 of salaries was paid in Jan, what was the balance Salaries Payable at December 31, 2009?
    4. If $1600 was received for services performed in Jan, what was the balance in Unearned Revenue at December 31, 2009?

    My answers:
    1. Supplies, Beg. = Supplies, End. - Supplies Purchased + Supplies Expenses
    Supplies, Beg. = $ 1000

    2. Total Premium = Insurance Expense x 12 (12 months = 1 year)
    Total Premium = $ 4800
    Half of the premium was left, therefore the policy was purchased 6 months ago

    3. Salaries Payable, Beg. = Salaries Payable, End. + Salaries Paid
    Salaries Payable = $ 3500

    4. Unearned Revenue, Beg. = Unearned Revenue, End.
    Would the $1,600 received for services performed in January affect the Unearned Revenue in the first place?

    Clarifications:
    Should Salaries Expense and Service Revenue be included in the computation for nos. 3 & 4, respectively? Unlike in nos. 1 & 2, nothing was stated in nos. 3 & 4 that these expenses and revenue were the Jan 31 adjusting entries. Could you please help me out with this?

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