EXERCISE 11-6 On December 31, the end ofthe year, the accountant for Fireside Ma

Question

EXERCISE 11-6 On December 31, the end ofthe year, the accountant for Fireside Magazine was called away suddenly because of an emergency. However, before leaving, the accountant jotted down a few notes pertaining to the adjustments. Journalize the necessary adjusting entries. Assume that Fireside Magazine uses the periodic inventory system. a-b. A physical count of inventory revealed a balance of $199,830. The Merchandise ng Inventory account shows a balance of $202,839. c. Subscriptions received in advance amounting to $156,200 were recorded a Unearned Subscriptions. At year-end, $103,120 has been earned.

Explanation / Answer

Fireside Magazine All Amounts in $ Journal Entries a-b. Cost of Goods Sold A/c DR 3009 To Merchandise Inventory A/c 3009 c. Unearned Subscriptions A/c DR 103120 To Subscriptions Earned A/c 103120 d. Depreciation - Equipment A/c DR 12300 To Accumulated Depreciation - Equipment A/c 12300 e. Insurance A/c DR 1612 To Prepaid Insurance A/c 1612 f. Rent A/c DR 1800 To Prepaid Rent A/c 1800 g. Salaries A/c DR 2400 To Salaries Payable A/c 2400 h. Supplies Expense A/c DR 880 To Supplies A/c 880

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