Task II. 1. Buick bega ADIUST THE ACCOUNTS-24 points n 2016 with supplies of $5,

Question

Task II. 1. Buick bega ADIUST THE ACCOUNTS-24 points n 2016 with supplies of $5,500. During the year, Buick purchased inventory of supplies taken on December 31, 2016 indicates that $3,000 of supplies were then Buick's adjusting entry on December 31, 2016 would include a addiona ased urin supplies for $700. If an A) Debit to supplies expense for $2,300 B) Debit supplies for $3,700 C) Credit supplies for $3,000 D) Debit supplies expense for $3,200 calculated that as of December 31, 2016 it had earned $2,500 on a $4,500 contract that will be completed ed in August 2017. Buick's adjusting entry on December 31, 2016 would include a and billed A) Debit to accounts receivable for $4,500 B) Debit to accounts recelvable for $2,500 C) Debit to unearned revenue for $2,000 D) Credit to unearned revenue for $2,000 E) No entry is required on December 31, 2016 3. Buick purchased equipment for $25,000. if depreciation for the year is estimated to be $$,000 then Buick's adjusting entry would include a A) Debit to accumulated depreciation for $5,000 B) Credit to equipment for $5,000 C) Credit to depreciation expense for $10,000 D) Credit to accumulated depreciation for $5,000 4. Buick weekly (S-day) payroll of $3,000 is paid on Fridays. if December 31 falls on a Tuesday, what adjusting entry should Buick make? A) Debit salaries expense $1,800 and credit salaries payable $1,800 B) Debit salaries expense $1,200 and credit salaries payable $1,200 C) Debit unpaid salaries $1,200 and credit salaries payable $1,200 D) Debit salaries payable $1,200 and credit salaries expense $1,200 In 2016, Buick received an advanced payment of $40,000, what adjusting entry would Buick make if 40% of the advance fee was earned in 2016? 5. A) Debit service revenue $16,000 and credit unearned revenue $16,000 B) Debit unearned revenue $16,000 and credit service revenue $16,000 C) Debit service revenue $24,000 and credit unearned revenue $24,000 D) Debit cash $16,000 and credit unearned revenue $16,000 E) Debit unearned revenue $24,000 and credit service revenue $24,000 6. Byick borrowed $30,000 in 2016 If interest and principal are both due when the note matures in 2017, what adjusting entry should Buick make on December 31, 2017? A) Debit unpaid interest and credit note payable. B) Debit interest expense and credit interest payable. C) Debit Interest expense and credit note payable $550 Rl No entry is required.

Explanation / Answer

1) Beginning balance of supplies 5,500 purchased during the year 700 less :balance in hand at year end -3000 Adjustment required for 3,200 1) since supplies used during the year were 3000 .We need to make adjustment entry for 3000 by crediting supplies account correct option c) Credit supplies for $3,000 2) option b) Debit to accounts receivable for $2,500 (we need to provide for the bill earned this year) 3) option d) Credit to accumulated depreciation for $5000 4) 3000/5 =$600per day Adjusting entry required for 600*2 = 1200 option B) is the correct answer Debit salaries expense and credit salaries payable 5) Earned during the year 40000*40%=16000 option B) is the correct answer Debit unearned revenue $16,000 and credit service revenue for $16000 6) option D) no etnry is required since note matures in 2017 no entry will be required at year end.

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