Sanford Cleaning and Maintenance, owned by Fred Sanford, provides cleaning services to hotels, motels, and hospitals. On

Question:

Sanford Cleaning and Maintenance, owned by Fred Sanford, provides cleaning services to hotels, motels, and hospitals. On January 31, 2016, the firm’s worksheet showed the following adjustment data. The balances of the revenue and expense accounts listed in the Income Statement section of the worksheet and the drawing account listed in the section of the worksheet are also given.
ADJUSTMENTS
a. Supplies used, $4,290
b. Expired insurance, $2,220
c. Depreciation on machinery, $1,680
REVENUE AND EXPENSE ACCOUNTS
401 Fees Income ............ $49,200 Cr.
511 Depreciation Expense—Machinery ... 1,680 Dr.
514 Insurance Expense ........... 2,220 Dr.
517 Rent Expense ............ 4,500 Dr.
520 Salaries Expense ........... 24,000 Dr.
523 Supplies Expense .......... 4,290 Dr.
526 Telephone Expense .......... 315 D
529 Utilities Expense .......... 960 Dr.
DRAWING ACCOUNT
302 Fred Sanford, Drawing ........ 3,600 Dr.

INSTRUCTIONS
1. Record the adjusting entries in the general journal, page 3.
2. Record the closing entries in the general journal, page 4. Use account numbers provided on page 186 for any account number not given.
Analyze: What effect did the adjusting entry for expired insurance have on the Insurance Expense account?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...