Exercise 3-05 (Video) Sheffield Corp. has the following balances in selected acc
ID: 2336062 • Letter: E
Question
Exercise 3-05 (Video) Sheffield Corp. has the following balances in selected accounts on December 31, 2020 Accounts Receivable 6,000 Equipment Interest Payable Notes Payable Prepaid Insurance Salaries and Wages Payable Supplies Unearned Service Revenue 10,200 4,020 2,300 32,800 All the accounts have normal balances. The information below has been gathered at December 31, 2020. 1, Sheffield Corp. borrowed $10,200 by signing a 12%, one-year note on September 1, 2020. 2. A count of supplies on December 31, 2020, indicates that supplies of $860 are on hand 3. Depreciation on the equipment for 2020 is $1,600 4. Sheffield paid $4,020 for 12 months of insurance coverage on June 1, 2020. 5. On December 1, 2020, Sheffield collected $32,800 for consulting services to be performed from December 1, 2020, through March 31, 2021 6. Sheffield performed consulting services for a client in December 2020. The client will be billed $3,800 7. Sheffield pays its employees total salaries of $10,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2020 Prepare adjusting entries for the seven items described above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)Explanation / Answer
Adjusting entry :
(To record supplies expense)
No account and explanation debit credit 1 Interest expense (10200*12%*4/12) 408 Interest payable 408 (To record interest adjusted) 2 Supplies expense (2300-860) 1440 Supplies 1440(To record supplies expense)
3 Depreciation expense 1600 Accumlated depreciation-equipment 1600 (To record depreciation expense) 4 Insurance expense (4020*7/12) 2345 Prepaid insurance 2345 (To record insurance expense) 5 Unearned service revenue (32800*1/4) 8200 Service revenue 8200 (To record service revenue) 6 Account receivable 3800 Service revenue 3800 (To record service revenue) 7 Salaries and wages expenses (10000*3/5) 6000 Salaries and wages payable 6000 (To record accured salary)Related Questions
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