Question

Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information:
30-Nov 31-Dec
Debit    Credit Debit Credit
Supplies $2,000 $3,500
Prepaid Insurance $8,000 $6,000
Salaries payable $11,000 $16,000
Unearned revenue $3,000 $1,500



The following information is known for the month of December:

1. Purchases of supplies during December total $2,600.
2. Supplies on hand at the end of December equal $2,550.
3. No insurance payments are made in December.
4. Insurance cost is $1,050 per month.
5. November salaries payable of $9,100 were paid to employees in December.
6. Additional salaries for December owed at the end of the year are $14,100.
7. On November 1, a tenant paid Golden Eagle $1,650 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.

Required:
Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31.

Answer 1

Answer:

GOLDEN EAGLE COMPANY

Adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31.

Debit Supplies Expense $2,050

Credit Supplies $2,050

Debit Insurance Expense $1,050

Credit Prepaid Insurance $1,050

Debit Salaries Expense $14,100

Credit Salaries Payable $14,100

Debit Unearned Revenue $1,500

Credit Rent Revenue $1,500

Explanation:

a) Data and Calculations:

Golden Eagle Company

November 30 adjusted trial balance

                                         30-Nov              31-Dec

                                   Debit    Credit    Debit    Credit

Supplies                   $2,000             $2,550

Prepaid Insurance   $8,000             $6,950

Salaries payable                  $11,000              $16,000

Unearned revenue              $3,000                $1,500

Supplies:

Nov. 30 balance  $2,000

Purchase               2,600

Supplies expense 2,050

Balance               $2,550

Prepaid Insurance:

Nov. 30 balance $8,000

Insurance exp.      1,050

Dec. 31 balance $6,950

Salaries Payable:

Nov. 30 balance $11,000

Salaries expense 14,100

Cash paid              9,100

Dec. 31 balance  16,000

Unearned Revenue:

Nov. 30 balance $3,000

Rent Revenue    $1,500

Dec. 31 balance    1,500