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Jaworskiâs Ski Store is completing the accounting process for its first year ended December 31, 2018. The transactions during 2018 have been journalized and posted. The following data are available to determine adjusting journal entries:

a. The unadjusted balance in Supplies was $840 at December 31, 2018. The unadjusted balance in Supplies Expense was $0 at December 31, 2018. A year-end count showed $110 of supplies on hand.
b. Wages earned by employees during December 2010, unpaid and unrecorded at December 31, 2010, amounted to $3,700. The last paychecks were issued December 28; the next payments will be made on January 6, 2011. The unadjusted balance in Wages Expense was $40,000 at December 31, 2010.
c. A portion of the store's basement is now being rented for $1100 per month to K. Frey. On November 1, 2010, the store collected six months' rent in advance from Frey in the amount of $6,600. It was credited in full to Unearned Rent Revenue
when collected. The unadjusted balance in Rent Revenue was $0 at December 31, 2010.
d. The store purchased delivery equipment at the beginning of the year. The estimated depreciation for 2010 is $3,000, although none has been recorded yet.
e. On December 31, 2010, the unadjusted balance in Prepaid Insurance was $4,800. This was the amount paid in the middle of the year for a two-year insurance policy with coverage beginning on July 1, 2010. The unadjusted balance in Insurance Expense was S800, which was the cost of insurance from January 1 to June 30, 2010.
f. Jaworski's store did some ski repair work for Frey. At the end of December 31, 2010, Frey had not paid for work completed amounting to S750. This amount has not yet been recorded as Repair Shop Revenue. Collection is expected
during January 2011.

Required:
Earlier in 2010, Jaworski's store had already provided, recorded, and collected cash for $5,000 of repair services for other customers.

a. For each of the items listed above, indicate the account names and adjusted balances that should be reported on
b. For each situation, prepare the adjusting journal entry that should be recorded for Jaworski's at December 31, 2010.

Respuesta :

anthougo

Answer:

Jaworski's Ski Store

1. Indication of the account names and the adjusted balances that should be reported on:

a. Supplies Expense $730 and Supplies $110

b. Wages Expenses $43,700 and Wages Payable $3,700

c. Unearned Rent Revenue $4,400 and Rent Revenue $2,200

d. Depreciation expense $3,000 and Accumulated Depreciation - Equipment  $3,000

e. Prepaid Insurance $3,600 and Insurance Expense $2,000

f. Accounts Receivable $750 and Repair Shop Revenue $5, 750

2. Adjusting Journal Entries at December 31, 2010:

a. Debit Supplies Expense $730

Credit Supplies $730

To record supplies expense for the year.

b. Debit Wages Expenses $3,700

Credit Wages Payable $3,700

To record accrued wages expense.

c. Debit Unearned Rent Revenue $2,200

Credit Rent Revenue $2,200

To record rent revenue earned.

d. Debit Depreciation expense $3,000

Credit Accumulated Depreciation - Equipment $3,000

To record depreciation expense for the year.

e. Debit Insurance Expense $1,200

Credit Prepaid Insurance $1,200

To record insurance expense from July 1 to December 31, 2010.

f. Debit Accounts Receivable $750

Credit Repair Shop Revenue $750

To record shope repairs on account.

Explanation:

Journal entries are also used to adjust accounts to reflect the accrual concept and matching principle of accounting.  They ensure that transactions are recorded in the period in which they occur instead of when cash is exchanged.  Transactions recorded with adjusting journal entries include prepaid expenses, accrued expenses, unearned revenue, accrued revenue, and adjustments for depreciation expenses.

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