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E4-13, Analyze adjusted data. This is a partial adjusted trial balance of Barone

ID: 2378338 • Letter: E

Question

E4-13, Analyze adjusted data. This is a partial   adjusted trial balance of Barone Company. BARONE COMPANY Adjusted Trial   Balance January 31, 2014 Debit Credit Supplies $700 Prepaid Insurance 1,560 Salaries and Wages Payable $1,060 Unearned Service   Revenue 750 Supplies Expense 950 Insurance Expense 520 Salaries and Wages   Expense 1,800 Service Revenue 4,000 Instructions: Answer these   questions, assuming the year begins January 1. (a) If the amount in Supplies Expense is the January 31 adjusting   entry, and $300 of supplies was purchased   in January, what was   the balance in Supplies on January 1? Supplies balance = Amount Computation: Title Amount Add: Amount Less: Amount Title Formula (b) If the amount in Insurance Expense is   the January 31 adjusting entry, and the original insurance premium was for 1   year, what was the total premium and when was the policy purchased? Total premium = Formula Text   as appropriate Formula Purchase   date = Date Enter text here. (c) If $2,500 of salaries was paid in   January, what was the balance in Salaries and Wages Payable at December 31, 2013? Salaries and wages   payable = Computation Title Title Less Title (d) If $1,800 was received in January   for services performed in January, what was the balance in Unearned   Service Revenue at   December 31, 2013? Service revenue = Computation Title Title Less Title E4-13, Analyze adjusted data. This is a partial   adjusted trial balance of Barone Company. BARONE COMPANY Adjusted Trial   Balance January 31, 2014 Debit Credit Supplies $700 Prepaid Insurance 1,560 Salaries and Wages Payable $1,060 Unearned Service   Revenue 750 Supplies Expense 950 Insurance Expense 520 Salaries and Wages   Expense 1,800 Service Revenue 4,000 Instructions: Answer these   questions, assuming the year begins January 1. (a) If the amount in Supplies Expense is the January 31 adjusting   entry, and $300 of supplies was purchased   in January, what was   the balance in Supplies on January 1? Supplies balance = Amount Computation: Title Amount Add: Amount Less: Amount Title Formula (b) If the amount in Insurance Expense is   the January 31 adjusting entry, and the original insurance premium was for 1   year, what was the total premium and when was the policy purchased? Total premium = Formula Text   as appropriate Formula Purchase   date = Date Enter text here. (c) If $2,500 of salaries was paid in   January, what was the balance in Salaries and Wages Payable at December 31, 2013? Salaries and wages   payable = Computation Title Title Less Title (d) If $1,800 was received in January   for services performed in January, what was the balance in Unearned   Service Revenue at   December 31, 2013? Service revenue = Computation Title Title Less Title

Explanation / Answer

(a) If the amount in Supplies Expense is the January 31 adjusting entry, and $300 of
supplies was purchased in January, what was the balance in Supplies on January 1?
300+950=1250

(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for 1 year, what was the total premium and when was
the policy purchased?
520*12 = 6240 original policy amount; 1560/520 = 3 months remaining in the one year policy, so it was purchased on May 1 of last year.

(c) If $2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2013?
x + 1800 - 1060 = 2500
x + 740 = 2500
x = 1760 beginning balance in salaries and wages payable

(d) If $1,800 was received in January for services performed in January, what was the balance in Unearned Service Revenue at December 31, 2013?
2000 revenue -1800 received means that 200 of revenue chance is from the balance in unearned fees. Which means that the beginning unearned service revenue balance was 750-200 = 550

E4-14 A partial adjusted trial balance for Fenske Company is given in E4-13.
Instructions
Prepare the closing entries at January 31, 2012.
Service revenue DEBIT 2000
Income summary CREDIT 2000

Income summary DEBIT 3270
Supplies Expense CREDIT 950
Insurance Expense CREDIT 520
Salaries and Wages Expense CREDIT 1,800

Capital DEBIT (or retained earnings) 1270
Income summary CREDIT 1270

Fourth closing entry not necessary because no dividends or drawings.