20 Project #4: Adjustments Credits Debits 50,938 12,250 84,720 1,850 480 30,550 12,250 Fido's Food Mart Unadjusted Trial Balance December 31, 20XX Account Title Cash Accounts Receivable Inventory Supplies Prepaid Insurance Equipment Vehicle Accumulated Depreciation - Equipment & Vehicle Accounts Payable Unearned Revenue (Gift Cards) Bonds Payable (mature 12/31/XX) Common Stock (200 shares @ $210/share, par $210) Retained Earnings Sales Revenue Operating Expenses Depreciation Expense Insurance Expense Rent Expense Supplies Expense Wages Expense Totals 62,128 375 12,000 42,000 0 132,625 34,840 0 5,750 15,500 249,128 249,128 The account balances at the end of the fourth month shown above are direct from the Unadjusted Trial Balance Required: 1. Fidos Food Mart purchased a three-month automobile insurance policy on December 1, 20XX for $480 and recorded it as Prepaid Insurance. Now that it is the end of the fiscal year, the accountant needs to prepare the adjusting journal entry to account for one month of insurance that was used. a. Show the balancing effects on the accounting equation b. Record the adjusting journal entry in two-line format using a debit and a credit. c. Show T-Accounts with beginning balances, transactions & end balances. Project #4: Adjustments 21 2. At the end of the fiscal year, a manual inventory count showed that $650 of supplies remain. Now, the accountant needs to prepare the journal entry to adjust the Supplies balance to the actual amount. a. Show the balancing effects on the accounting equation b. Record the adjusting journal entry in two-line format using a debit and a credit. c. Show T-Accounts with beginning balances, transactions & end balances. 3. Four of the $25 gift cards sold in November were redeemed this month. Show the adjusting journal entry that the accountant needs to prepare. a. Show the balancing effects on the accounting equation b. Record the adjusting journal entry in two-line format using a debit and a credit. c. Show T-Accounts with beginning balances, transactions & end balances. 4. Prepare an Adjusted Trial Balance for Fido's Food Mart. 5. Prepare the following financial statements from the Adjusted Trial Balance in #4: a. Single-step Income Statement b. Statement of Retained Earnings c. Classified Balance Sheet YEAR END REVIEW OKUMOHTVShutterwock.com Income Statement Revenue Expenses Insurance Expense Supplies Expense Balance Sheet Assets Cash Accounts Receivable Inventory Suppllies Prepaid Expenses Liabilities Accounts Payable Wages Payable Unearned Revenue (Gift Cards) Equity Common Stck Retained Earnings adiustinents is to accurately report the economic impact of the account etermine what expenses have been used during the sed, are assets (prepayments) for future use. The objective for period-end adjustm in period. An analysis will be necessary to determine period. Expenses that havent been used, are assets Revenue is earned when the goods are del the delivery of goods or services are a promise to deliver goods or services ds are delivered or the service is performed. Revenue received before are a Liability to the company. The company must complete its of services, or refund the money received in advance