GENERAL JOURNAL ENTRIES (32 points)-ASSUME ADJUSTING ENTRIES ARE MADE AT THE END
ID: 2537792 • Letter: G
Question
GENERAL JOURNAL ENTRIES (32 points)-ASSUME ADJUSTING ENTRIES ARE MADE AT THE END OF THE YEAR A) Vicky-Vesta Corporation purchases equipment worth $120,000 (expected life of 5 years; $20,000 salvage value) on October 1. The company uses straight-line depreciation and the equipment is placed into service the same day as it is purchased. Provide the adjusting entry for December 31.(5 points) $1,200 of supplies are on hand. Supplies costing $5,400 are purchased on October 16. On December 31,a ountrevealsthat$2,650ofsupplies remain ProvideONLYthe endofyearadjustint entry.(s Points) B) 2950 Supples 430 November 4: Vicky-Vesta receives a prepayment of $5,000 in cash for services yet to be performed. By December 31, 90% of the work has been completed. Provide ALL necessary ournal entries sports) C) D) On November 16, Vicky-Vesta Corporation takes out a 1-year, $90,000 note payable with an interest rate of 6%. Provide entries for December 31 as well as the repayment of the loan the next year. (6 points) E) December 20: Vicky-Vesta Corporation hires its first employee, Salvo, who will earn $7,000/month and will be paid on the 19th of each month. The company considers his salary to be split 40% in the first month and 60% in the next. Provide the journal entries for December 31 and his first payday on January 19, (6 points) Calculations show that by December 31, the company has done consulting work with a value of $8,000 for which it has yet to be paid. The company receives 75% of the payment on January 17 of the next year. Provide necessary entries for both December 31 and January 17.(5 points) F)Explanation / Answer
Journal Entries on Dec 31 : Date Accounts Titles Debit $ Credit $ A Depreciation expense 10000 Acc. Dep-Equipment 10000 (120000-20000)/5]*50% B Supplies exp 4200 Supplies 4200 (5400-1200) C Unearned service revenues 4500 Service Revenues 4500 D Interest expen 675 Interest payable 675 (90000*6%*1.5/12) 15-Nov Note payable 90000 Interest payable 675 Interest expense 4725 Cash 95400 E Salary exp. 2800 Salary payable 2800 (7000*40%) F AR 6000 Service revenue 6000 (8000*75%) 17-Jan Cash 6000 AR 6000
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