The ledge of Duggan Rental Agency on march 31 adjusting entries

Inventories Adjusting Entries The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance 3,600 9.458 Supplies 2.800 Equipment 25.000 Accumulated Depreciation Equipment 8,400 Accounts Payable 5.633 Notes Payable 20.000 Unearned Rent Revenue 8,400 Rent Revenue 60,000 Interest Expense 0 Salaries and Wages Expense 14.000 An analysis of the accounts shows the following 1. The equipment has no salvage value and the annual depreciate rate is 20% under straightline method. 2. One-fourth of the unearned rent was recognized as revenue during the quarter. 3. Interest on notes payable is accrued, the annual rate is 10%. 4. Supplies on hand total $950. 5. Insurance expires at the rate of $400 per month. 6. Salaries of $2490 have been earned by employees but not yet recorded as of March 31. 7. Assume all purchases where made on account and accounts payable is only used for inventory purchases. 8. Cost of goods sold is $39,051. Instructions Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense, Credit Debit 25.000 1 Equipment Accumulated Depreciation Equipment 8,400 2 60.000 Rent revenue Uncarned Rent Revenue 20,000 3 3 Interest Expense Notes Payable 20,000 4 2,800 950 1,850 Supplies Cash Supplies Expenses Prepaid Insurance Insurance Expense Accounts payable 5 3,600 16,000 12,400 6 14,000 Salaries and Wages Expense Salaries payable Cash 2,490 11,510 2. On Jan 1, the balance of Inventory account is $8.911 and account payable is $5,124. Record the inventory purchase journal entry duirng this quarter. What amount did Duggan pay in cash to its suppliers during this quarter? Record the journal entry. hint: Inventory ending balance = beginning + purchase -cogs 7 7 Inventory Accounts Payable purchases 8,911 5,124 3,787 hint: AP ending = AP beginning + Purchase - Payment 8 39,051 cost of goods sold Inventory purchases 8,911 30.140