Question
Select the correct adjusting entry. If no entry is needed, select No entry required for this transaction. 1. Depreciation expense for the month on the
Select the correct adjusting entry. If no entry is needed, select No entry required for this transaction.
1.Depreciation expense for the month on the building is $2,000.
2.A count of the Supplies account indicates that supplies of $450 have been used.
3.Two months have passed since insurance for the year was paid. The amount of the check was $1,200. The entry at time of payment debited the Prepaid Insurance account.
4.Employees have earned $400 since the last pay day.
5.Advertising in the local paper was paid this month in the amount of $500. The amount was debited to Prepaid Advertising, and the advertisement is to run next month.
6.Joe Moreland paid us $500 in advance for work to be done on his residence. The entry to record the collection of this cash included a credit to Labor Revenue. The work is halfway complete at the end of this month.
7.The company has received a bill for utilities for the month in the amount of $1,750. This bill will be paid next month.
8.Interest on a loan at the bank is due as of the November 1. We borrowed the $5,000 three months ago at 6% annual interest.
9.A customer paid us $600 in advance for merchandise to be shipped to him. At the time the check was received, the Unearned Revenue account was credited. The shipping clerk tell us that one-third of the merchandise has been shipped and received by the customer.
10.Depreciation on the trucks was last taken a year ago. The trucks cost $75,000, have a $5,000 salvage and are estimated to last for seven years.
11.The Prepaid Advertising account has a balance of $2,300. Of this amount, we have used $950 this month.
12.
DR Depreciation Expense 1,500
CR Accumulated Depreciation 1,500 To record depreciation on trucks for the year. The trucks cost $30,000 and have no salvage. They are being depreciated straight line over six years.
13.
DR Interest Revenue 730
CR Interest Receivable 730 To record one years interest on a loan to an officer of the company. The loan was for $10,000 at 7% annual interest.
14.
DR Supplies Expense 563
CR Supplies 563 The Supplies account started with a balance of $1,900. At the end of the period, a count of remaining supplies indicated we had $563 left.
15.
DR Wages Expense 1,900
CR Wages Payable 1,900 Employees have earned $1,900 since last pay day.
16.
DR Taxes Payable 700
CR Taxes Expense 700 Received a bill from the County Treasurer for $700 for property taxes. The taxes are due next month.
17.
DR Sales Revenue 2,800
CR Accounts Receivable 2,800 To record sales made on the last day of the year that the company has not yet billed.
18.
DR Rent Expense 680
CR Prepaid Rent 680 To record one month of rent expense. Three months ago, the company paid $8,160 for one years rent in advance.
19.
DR Utilities Expense 800
CR Utilities Payable 800 The company received an electric bill for $800 for the current month. The bill is due next month.
20.
DR Supplies 1,900
CR Supplies Expense 1,900 The supplies account had a balance of $2,300 at the end of last month. The count at the end of this month showed a balance of $400.
21.
DR Unearned service fees 1,000
CR Service fee revenue 1,000 The company performed $1,000 of services that the client had paid for in advance.
22.
DR Depreciation Expense 2,800
CR Truck 2,800 To record depreciation on the company truck for one year. The trucks original cost was $12,200, with a $1,000 salvage value and an estimated life of four years
23.
DR Taxes Expense 500
CR Taxes Receivable 500 The company received a property tax bill, due next month, for $500.
24.
DR Interest Receivable 50
CR Interest Revenue 50 To record one month of interest expense. The company borrowed $12,000 for two years at 5% interest per year. Interest is due every six months.
25.
DR Prepaid Insurance 250
CR Insurance Expense 250 To record one month of insurance expense. Four months ago, the company paid $3,000 for one year of insurance coverage.
26.
DR Wages Expense 3,000
CR Wages Payable 3,000 To record wages for December 30 and 31, 2007, to be paid on January 5, 2008.
27.
No entry was made The office equipment is brand new, having been purchased only one year ago for $5,000. Since it is expected to last five years and have a salvage of $1,000, the bookkeeper has decided that it really shows so little wear that depreciation need not be taken this year.
28.
DR Advertising Expense 700
CR Prepaid Advertising 700
The company advertised in the local paper in the last month. When the bill was paid at the first of last month, the Prepaid Advertising account was debited.
29.
DR Utilities Payable 900
CR Utilities Expense 900 A bill was received from the local utility company for $900. The bill is due next month.
30.
DR Supplies Expense 550
CR Supplies 550 The Supplies account started the period with a balance of $1,200. At the end of the month, a count of supplies on hand indicated $550 left.
31.
DR Interest Expense 100
CR Interest Payable 100 Money borrowed from the bank carries an interest rate of 6% per year. Interest was last paid a month ago and is due again in another five months. The amount borrowed is $20,000.
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