Question 2.

The Catala Corp. prepares monthly financial statements. Adjusted trial balance information for November and December 2022 show the following information:

		November 30			December 31
		DR	CR		DR	CR
Accounts receivable		10,000			3,000
Supplies		1,750			3,000
Prepaid insurance		6,000			4,500
Salaries payable			10,500			15,000
Unearned rent			2,500			1,000

So we also know this additional information:

a)Cash of $80,000 was collected from customers.

b)Supplies expense of $2,000 was reported on the December income statement.

c)No insurance payments were made in December.

d)$18,000 was paid to employees during December.

e)On November 1, 2022, a tenant paid Roberson $3,000 for rent for November through January.

Answer the following questions, showing LABELED work to receive full credit:

1)What was sales revenue for December?

2)How much in the way of Supplies were purchased during December?

3)What was the adjusting entry for insurance written at the end of December?

4)How much was salaries expense for December?

5)How much rent revenue was recognized during December? Write the adjusting entry needed at December 31.

6)If the adjusting entry for supplies had not been written, show the effect on Catalas net income, assets, liabilities, and equity.

7)If the adjusting entry for salaries had not been written, show the effect on Catalas net income, assets, liabilities, and equity.