d Safari File Edit View History Bookmarks Window Help I: 43-" smil- . ( E] El (i 5555 i p|ayerui.mneducarioncom E [a M Mill: Reader ' F a, Problem 3-2A Preparing adjusting and subsequentjournal entries P1 P2 P3 P4 '4' D 7"" Arnez Company's annual accounting period ends on December 31. The following infarmation concerns the adjusting entries to be recorded as of that date. Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Ofce ., Supplies; Prepaid Insurance; Building; Accumulated DepreciationBuilding; Salaries Payable; Unearned Revenue; Rent 5'; Revenue; Salaries Expense; Ofce Supplies Expense; Insurance Expense; and Depreciation ExpenseBuilding. ' ' i a. The Ofce Supplies account started the year with a $4,000 balance. During the year, the company purchased supplies for $13,400, which was added to the Ofce Supplies account. The inventory of supplies available at December 31 totaled ]_ $2,554- b. The Prepaid Insurance account had a $20,000 debit balance at December 31 before adjusting for the costs of any expired '0' coverage for the year. An analysis of prepaid insurance shows that $12,880 of unexpired in5urance coverage remains at year-end. c. The company has 15 employees, who earn a total of $1,960 in salaries each working day. They are paid each Monday for I their work in the ve-day workweek ending on the previous Friday. Assume that December 31 is a Tuesday, and all 15 employees worked the rst two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for \"a ve full days on Monday, January 6 of next year. d. The company purchased a building at the beginning of this year. It cost $960,000 and is expected to have a $45,000 3 salvage value at the end of its predicted 30-year life. Annual depreciation is $30,500. 6. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $3,000 Page 130 o l. a e ES 0 \"IE 0 o 'hot Il-.' .42 PM ,9 per month, starting on November 1. The rent was paid on time on November 1, and the amount received was I. credited to Rent Revenue. However, the tenant has not paid the December rent. The company has worked out an agreement 3 .1 with the tenant, who has promised to pay both December and January rent in full on January 15. m f. On November 1, the company rented space to another tenant for $2,800 per month. The tenant paid five months' rent in my advance on that date. The payment was recorded with a credit to the Unearned Revenue account. 39 \"M w ~ ii Req uired 1. Use the information to prepare adjusting entries as of December 31. ' 0mm Check (lb) Dr. Insurance Expense, $7,120 taller-pk (1G9 Dr. Depreciatlon Expense. $30,500 2. Prepare journal entries to record the rst subsequent cash transaction in January of the next year for parts c and e. m s