exercise 3 - 7 (algo) record year - end adjusting entries (lo3 - 3) golden eagle company has the following…

exercise 3 - 7 (algo) record year - end adjusting entries (lo3 - 3) golden eagle company has the following balances at the end of november: supplies prepaid insurance salaries payable deferred revenue debit november 30 $1,150 credit $9,300 $4,600 0 the following information is known for the month of december: 1. purchases of supplies for cash during december were $2,800. supplies on hand at the end of december equal $2,650. 2. no insurance payments are made in december. insurance expired in december is $1,150. 3. november salaries payable of $9,300 were paid to employees in december. additional salaries for december owed at the end of the year are $14,300. 4. on december 1, golden eagle received $1,950 from a customer for rent for the period december through february. by the end of december, one month of rent has been provided.

exercise 3 - 7 (algo) record year - end adjusting entries (lo3 - 3) golden eagle company has the following balances at the end of november: supplies prepaid insurance salaries payable deferred revenue debit november 30 $1,150 credit $9,300 $4,600 0 the following information is known for the month of december: 1. purchases of supplies for cash during december were $2,800. supplies on hand at the end of december equal $2,650. 2. no insurance payments are made in december. insurance expired in december is $1,150. 3. november salaries payable of $9,300 were paid to employees in december. additional salaries for december owed at the end of the year are $14,300. 4. on december 1, golden eagle received $1,950 from a customer for rent for the period december through february. by the end of december, one month of rent has been provided.

Answer

Explanation:

Step1: Adjust supplies

The supplies on - hand at the end of December is $2,650. The beginning balance of supplies was $1,150 and supplies purchased were $2,800. The supplies used is $1,150 + 2,800-2,650 = $1,300. Debit: Supplies Expense $1,300 Credit: Supplies $1,300

Step2: Adjust insurance

Insurance expired in December. Since no insurance payments were made in December and the expired amount is not given separately, we assume the expired insurance is related to the prepaid insurance balance. But no prepaid - insurance balance details are sufficient to calculate, so we skip this for now (assuming no adjustment needed if no information).

Step3: Adjust salaries

Salaries payable at the end of November was $9,300. Additional salaries for December owed at the end of December is $14,300. Debit: Salaries Expense $14,300 Credit: Salaries Payable $14,300

Step4: Adjust deferred revenue

On December 1, received $1,950 for rent for December - February. Rent for December is $1,950/3 = $650. Debit: Deferred Revenue $650 Credit: Rent Revenue $650

Answer:

  1. Supplies adjustment: Debit: Supplies Expense $1,300 Credit: Supplies $1,300
  2. Salaries adjustment: Debit: Salaries Expense $14,300 Credit: Salaries Payable $14,300
  3. Deferred - revenue adjustment: Debit: Deferred Revenue $650 Credit: Rent Revenue $650