AC 321 Int I-SP18 Student Project- Comp Insert Page Layout Formulas Data Review View Calibri (Body) 11AA Wrap Text Ger legitimate adjusting or closing entries will be considered financial statement misrepresentation sufficient to result in a failing gr Part 1. Information to Make Necessary Adjusting Entries The following transaction information relates to Gatsby, Inc. as of December 31 of the current year. The company uses the calendar year as its annual reporting period and the Accrual Method of Accounting. They initially record prepaid and unearned tems in balance sheet accounts (assets and liabilities, respectively). Prepare all necessary adjusting journal entries and post to the T-Accounts on page 2 (see tab below). A The company's weekly payroll Is $2,500 and is paid each Friday for a five-day workweek. Assume December 31st falls on a Wednesday, but the employees will not be paid their wages until Friday January 2 of the following year. B. Eighteen months earlier, on July 1st the company purchased equipment that cost $160,000. Its useful life is predicted to eight years, at which time the equipment is expected to be worthless (zero salvage value). Gatsby, Inc. uses the straight-line depreciation method, which has NOT been recorded for this year On October 1st of the current year Gatsby, Inc. was paid $35,000 in advance of future installation of alarm systems in 5 new homes. The amount was credited to the Unearned Revenue-Alarms account. Between October 1st and December 31st alarm systems were installed in 2 homes, completing those jobs. C. D. On Sept 1st of the current year the company purchased a 12-month insurance policy for $24,000. The transaction was recorded with a debit to the Prepaid Insurance account. Insurance expense has not been recorded for September, October, November or December E. On December 30 of the current year the company completed an $18,000 job that has not been billed/involced and therefore has not been recorded F. A$100,000 long-term note payable was signed on September 1st of the current year. It is a five-year note with a 7S% interest rate. Interest expense as not been accrued for this year G. Supplies at the beginning of the current year had a balance of $ 200. Supplies valued at $4,100 were purchased thoughout the year. The current balance in the account is $700. Calculate the amount of supplies used and record the adjusting entry needed to update the account. Part 2. Using the Unadjusted Trial Balance and Adjusting Entries in Part A- Prepare the Adjusted Trial Balance for Gatsby Corportion Below: Gatsbv. inc. ProjectT-Accounts Grading Rubric+
