E$4-5($Algo$)$ Recording Adjusting Entries and Reporting Balances in Financial Statements LO$4-1,4-2$

A$+$T Williamson Company is making adjusting entries for the year ended December $31$ of the current year. In developing information for the adjusting entries, the accountant learned the following:

a$.$ A two$-$year insurance premium of $$6,720$ was paid on October $1$ of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October $1.$

b$.$ At December $31$ of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents.

Shipping supplies on hand, January $1$ of the current year

Purchases of shipping supplies during the current year

Shipping supplies on hand, counted on December $31$ of the current year

$$12,500$

$66,500$

$11,000$

Required:

Record the adjusting entry for insurance at December $31$ of the current year.

Record the adjusting entry for supplies at December $31$ of the current year, assuming that the shipping supplies purchased during the current year were debited in full to the account Shipping Supplies.

What amounts should be reported on the current year's income statement for the following items?

What amounts should be reported on the current year's balance sheet for the following items?