Divteks Variety Store is completing the accounting process for the year just ended on December 31, 2020 The transactions during 2020 have been journalized and posted The following data with respect to adjusting entries are available Wages earned by employees during December 2020, unpaid and unrecorded at December 31, 2020, amounted to $3,550 The last payroll was December 28 the next payroll will be January 11, 2021 Office supplies inventory at January 1, 2020 was $520 Office supplies purchased and debited to office supplies inventory during the year amounted to $1,240 The year end count showed $370 of supplies on hand One fourth of the basement space is rented to Healds Specialty Shop for $670 per month, payable monthly On December 31, 2020, the rent for November and December 2020 had not been collected or recorded Collection is expected January 10, 2021 The store used delivery equipment that cost $53,800 the estimated depreciation for 2020 was $10,760 On July 1, 2020, a two year insurance premium amounting to $2,740 was paid in cash and debited in full to prepaid insurance Coverage began on July 1, 2020 The remaining basement space of the store is rented for $2,140 per month to another merchant, M Carlos Inc Carlos sells compatible, but not competitive, merchandise On November 1, 2020, the store collected six months rent in the amount of $12,840 in advance from Carlos it was credited in full to deferred rent revenue when collected Divteks Variety Store operates a repair shop to meet its own needs The shop also does repairs for M Carlos At the end of December 31, 2020, Carlos had not paid $920 for completed repairs This amount has not yet been recorded as repair shop revenue Collection is expected during January 2021 Required For each of the transactions above, indicate the effects of adjusting entry on the financial statements by entering the amounts in the appropriate sections of the financial statement (Enter any decreases to account balances with a minus sign )

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

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 11, 2024

Divteks Variety Store is completing the accounting process for the year just ended on December 31, 2020. The transactions during 2020 have been journalized and

Divteks Variety Store is completing the accounting process for the year just ended on December 31, 2020. The transactions during 2020 have been journalized and posted. The following data with respect to adjusting entries are available:

Wages earned by employees during December 2020, unpaid and unrecorded at December 31, 2020, amounted to $3,550. The last payroll was December 28; the next payroll will be January 11, 2021.
Office supplies inventory at January 1, 2020 was $520. Office supplies purchased and debited to office supplies inventory during the year amounted to $1,240. The year-end count showed $370 of supplies on hand.
One-fourth of the basement space is rented to Healds Specialty Shop for $670 per month, payable monthly. On December 31, 2020, the rent for November and December 2020 had not been collected or recorded. Collection is expected January 10, 2021.
The store used delivery equipment that cost $53,800; the estimated depreciation for 2020 was $10,760.
On July 1, 2020, a two-year insurance premium amounting to $2,740 was paid in cash and debited in full to prepaid insurance. Coverage began on July 1, 2020.
The remaining basement space of the store is rented for $2,140 per month to another merchant, M. Carlos Inc. Carlos sells compatible, but not competitive, merchandise. On November 1, 2020, the store collected six months rent in the amount of $12,840 in advance from Carlos; it was credited in full to deferred rent revenue when collected.
Divteks Variety Store operates a repair shop to meet its own needs. The shop also does repairs for M. Carlos. At the end of December 31, 2020, Carlos had not paid $920 for completed repairs. This amount has not yet been recorded as repair shop revenue. Collection is expected during January 2021.

Required:

For each of the transactions above, indicate the effects of adjusting entry on the financial statements by entering the amounts in the appropriate sections of the financial statement. (Enter any decreases to account balances with a minus sign.)