Arnez Companys annual accounting period ends on December 31, 2017 The following information concerns the adjusting entries to be recorded as of that date The Office Supplies account started the year with a $3,025 balance During 2017, the company purchased supplies for $12,493, which was added to the Office Supplies account The inventory of supplies available at December 31, 2017, totaled $2,662 An analysis of the company's insurance policies provided the following facts Policy Date of Purchase Months of Coverage Cost A April 1, 2015 24 $ 10,464 B April 1, 2016 36 9,216 C August 1, 2017 12 8,064 The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost (Year end adjusting entries for Prepaid Insurance were properly recorded in all prior years ) The company has 15 employees, who earn a total of $2,900 in salaries each working day They are paid each Monday for their work in the five day workweek ending on the previous Friday Assume that December 31, 2017, is a Tuesday, and all 15 employees worked the first two days of that week Because New Years Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2018 The company purchased a building on January 1, 2017 It cost $990,000 and is expected to have a $45,000 salvage value at the end of its predicted 25 year life Annual depreciation is $37,800 Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $2,100 per month, starting on November 1, 2017 The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account However, the tenant has not paid the December rent The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15 The tenant has agreed not to fall behind again On November 1, the company rented space to another tenant for $1,903 per month The tenant paid five months' rent in advance on that date The payment was recorded with a credit to the Unearned Rent account

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 16, 2024

Arnez Companys annual accounting period ends on December 31, 2017. The following information concerns the adjusting entries to be recorded as of that date. The

Arnez Companys annual accounting period ends on December 31, 2017. The following information concerns the adjusting entries to be recorded as of that date.

The Office Supplies account started the year with a $3,025 balance. During 2017, the company purchased supplies for $12,493, which was added to the Office Supplies account. The inventory of supplies available at December 31, 2017, totaled $2,662.
An analysis of the company's insurance policies provided the following facts.

Policy	Date of Purchase	Months of Coverage	Cost
A	April 1, 2015	24	$	10,464
B	April 1, 2016	36		9,216
C	August 1, 2017	12		8,064

The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)

The company has 15 employees, who earn a total of $2,900 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2017, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Years Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2018.
The company purchased a building on January 1, 2017. It cost $990,000 and is expected to have a $45,000 salvage value at the end of its predicted 25-year life. Annual depreciation is $37,800.
Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $2,100 per month, starting on November 1, 2017. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again.
On November 1, the company rented space to another tenant for $1,903 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account.