1. Record the adjusting entry at the end of December for prepaid insurance. 2. R

Question

1. Record the adjusting entry at the end of December for prepaid insurance.

2. Record the adjusting entry at the end of December for accrued salaries and wages.

3. Record the adjusting entry at the end of December for deferred rent.

The Righter Shoe Store Company prepares monthly financial statements for its bank. The November 30 and December 31, 2018, trial balances contained the following account information Nov. 30 Dec. 31 Cr. Cr. 3,400 7,900 4,900 5,450 Supplies Prepaid insurance Salaries and wages payable Deferred rent revenue 19,500 5,800 16,900 2,900 The following information also is known a. The December income statement reported $3,900 in supplies expense b. No insurance payments were made in December c. $19,500 was paid to employees during December for salaries and wages d. On November 1, 2018, a tenant paid Righter $8,700 in advance rent for the period November through January. Deferred rent revenue was credited Required 1. Using the above information for December, complete the T-accounts below. The beginning balances should be the balances as of November 30 2. Using the above information, prepare the adjusting entries Righter recorded for the month of December

Explanation / Answer

T- accounts :

supplies:

working:

purchase = expense + ending balance - opening balance

=>3900+4900-3400 =>5,400.

2.prepaid insurance:

since no payments are made:

expense = beginning balance - ending balance

=>7,900 - 5,450

=>2,450.

salaries and wages payable:

since 19,500 has been paid, current month wages will be new accrued balance.

deferred rent revenue:

8,700 paid for 3 month => monthly rent = 8,700 / 3 =>2,900.

2.adjusting entries:

2,450

beg bal 3,400 purchase 5,400 3900 expense end balance 4,900

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