Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Arnez Company's annual accounting period ends on December 31, 2019. The following information concerns the adjusting entries to be recorded as of that date. a.

image text in transcribed
image text in transcribed
Arnez Company's annual accounting period ends on December 31, 2019. The following information concerns the adjusting entries to be recorded as of that date. a. The Office Supplies account started the year with a $3,525 balance. During 2019, the company purchased supplies for $14,558, which was added to the Office Supplies account. The inventory of supplies available at December 31,2019 , totaled $3,102. b. An analysis of the company's insurance policies provided the following facts. The total premlum 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.) c. The company has 15 employees, who earn a total of $2,750 in salaries each working day. They are paid each Monday for their work In the flve-day workweek ending on the previous Friday. Assume that December 31,2019 , is a Tuesday, and all 15 employees worked the first two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6,2020 . d. The company purchased a building on January 1,2019 . It cost $850,000 and is expected to have a $45,000 salvage value at the end of its predicted 20-year life. Annual depreciation is $40,250. e. Since the company is not large enough to occupy the entire bullding it owns, it rented space to a tenant at $2,600 per month, starting on November 1, 2019. The rent was paid on time on November 1, and the amount recelved 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. f. On November 1 , the company rented space to another tenant for $2,356 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. Assume no other adjusting entries are made during the year. Required: 1. Use the information to prepare adjusting entries as of December 31, 2019 . 2. Prepare journal entries to record the first subsequent cash transaction in 2020 for parts c and e 1. Use the information to prepare adjusting entries as of December 31, 2019 . 2. Prepare journal entries to record the first subsequent cash transaction in 2020 for parts c and e. Complete this question by entering your answers in the tabs below. Use the information to prepare adjusting entries as of December 31, 2019. Journal entry worksheet Record the adjusting entry related to the company's insurance. Note: Enter debits before credits

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Cost Of Quality Audit

Authors: W. Jeffrey Howard

1st Edition

1902433629, 978-1902433622

More Books

Students also viewed these Accounting questions

Question

adequate backups will protect against all of the following except

Answered: 1 week ago

Question

1. Outline the listening process and styles of listening

Answered: 1 week ago

Question

4. Explain key barriers to competent intercultural communication

Answered: 1 week ago