Determining Financial Statement Effects of Three Adjusting Entries

Terbish Company started operations on January 1, 2012. It is now December 31, 2012, the end of the annual accounting period. The part-time bookkeeper needs your help to analyze the following three transactions:

a. During 2012, the company purchased office supplies that cost $1,600. At the end of 2012, office supplies of $400 remained on hand.

b. On January 1, 2012, the company purchased a special machine for cash at a cost of $12,000. The machine's cost is estimated to depreciate at $1,200 per year.

c. On July 1, 2012, the company paid cash of $600 for a two-year premium on an insurance policy on the machine; coverage begins on July 1, 2012.

Required:

Complete the following schedule with the amounts that should be reported for2012:

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Selected Balance Sheet Accounts Amount to Be Reported at December 31, 2012 Assets Equipment Accumulated depreciation Net book value of equipment Office supplies Prepaid insurance Selected Income Statement Accounts for the Year Ended December 31, 2012 Expenses Depreciation expense Office supplies expense Insurance expense