Question 1 - The following information was collected by the Alberta Company to be used in adjusting entries for the month of August. a. The ledger showed that the August 31 inventory of computer supplies was $1,720. An actual count of supplies showed that only $500 of supplies were on hand. b. The company paid $3,600 for a two-year insurance policy on August 1. The company records the amount of insurance used up every month with an adjusting entry. c. The amount of office supplies used during August is $32.50. d. The company has done work for clients; this work has not been recorded in the accounting records and totals $4,550. Payment will be received in November. e. The bookkeeper received the telephone bill for $107 for the month of December in the first week of January. f. The $2,000 balance in the prepaid rent account is for the Month of August.

Question 2 Purchasing and Sales Journalizing Following are the May 2023 merchandising transactions for the Tecumseh Company. Use journal paper to record the entries to record each transaction. Tecumseh uses a perpetual inventory system. The terms of all sales to customers are 3/15 n 45 unless otherwise noted. May 1 Sold merchandise on account to the Corn Corporation, retail value of $11,250, cost value of $5,750. May 3 Purchased $18,000 of merchandise from the Tarlee Co., terms 2/10 EOM. May 4 Gave the Corn Corp. a price reduction of $750 to keep merchandise that had been damaged in delivery. May 4 Purchased merchandise from the Alberta Centre, terms n 30, value of $3,750. May 7 Sold merchandise to Mr. Jim Bobb, retail value of $11,250, cost of $5,000. Mr. Bobb paid $7,000 in cash and the balance was on account. May 10 Returned $3,000 of merchandise that was found to be faulty to the Tarlee Co. May 13 Paid for the merchandise purchased from the Tarlee Co. May 16 Cash sales for the first half of the month are retail value of $75,000, cost of $29,000.