Allof the transactions of Starfish Tattoo Parlor Inc. for the year have been jou

Question

Allof the transactions of Starfish Tattoo Parlor Inc. for the year have been jounalized and postod. The following information has been gathered for the adjustment process as of December 31, 2016: A) The Supplies account shows a balance of $1,040. A count of supples revealed $380 on hand. B) The $1,200 premium relating to a ono-year insurance poliay was paid on December 1, 2016. C) The company's equipment, which was purchased last year, depreciates at a rate of $1,400 per year D) On September 30, 2016, a usto mer paid $10,700 in advance for services. Of this amount, 30% was eaned as of 12/31/16 E) Employees are paid $1,300 on Fridays for the 5-day work weok, which ands on that Fridey. However, December 31, 2016 falls on a Thursday The company has completed $570 of work for customers; the customers have not yet been billed and the related revenue has not been recorded. Required: a. Prepare the required adjusting entries required at December 31, 2016. (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record adjusting entry given that the supplies account shows a balance of $1,040. A count of supplies revealed $360 on hand at 12/31/16. Note: Enter debits before cred ts Transaction General Journal Debit Credit Record entry Clear entry View general journal 21

Explanation / Answer

Journal entries : Date Accounts Titles Debit $ Credit $ A Supplies expense 680 Supplies account 680 (being supplies expense booked (1040-360)) B Insurance expense 100 Prepaid Insurance 100 (being insurance expense booked (1200/12)) C Depreciation expense 1400 Acc Dep - Equipment 1400 (being depreciation expense booked @ 1400) D Unearned revenue 3210 Earned revenue 3210 (10700*30%=3210) E Wagaes and salary expense 1040 Wages and salary payable 1040 (1300*4/5=1040) F Accounts Receivable 570 Earned Revenue 570 (being earned revenue booked)

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