Camillo?s Cleaning Services is gathering information for its year-end, April 30, 2020. Selected accounts on the April

Question:

Camillo?s Cleaning Services is gathering information for its year-end, April 30, 2020. Selected accounts on the April 30, 2020, unadjusted trial balance are reproduced below:

Required

Prepare the required annual adjusting entries at April 30, 2020, based on the following additional information:

a. The balance in the Prepaid Equipment Rental account is for 18 months of equipment rental that began December 1, 2019.

b. $6,000 of the balance in the Prepaid Warehouse Rental account had been used as of April 30, 2020.

c. The balance in the Prepaid Insurance account represents six months of insurance effective February 1, 2020.

d. A count of the cleaning supplies revealed that $2,850 had been used.

Analysis Component: Which GAAP require the recording of adjusting entries and why?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...

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