Journalize the required adjusting entries for the year ended December 31 for But
ID: 2461785 • Letter: J
Question
Journalize the required adjusting entries for the year ended December 31 for Butler Spa and Pool Accessories. Butler Spa and Pool Accessories uses the periodic inventory system. On December 31, a physical count of inventory was taken. The physical count amounted to $22,624. The Merchandise Inventory account shows a balance of $21,696. On July 1 of this year, $2,400 was paid for a one-year insurance policy. On November 1 of this year, $420 was paid for three months of advertising. As of December 31, the balance of the Unearned Membership Fees account is $15,600. Of this amount, $9,200 has been earned. Equipment purchased on May 1 of this year for $8,000 is expected to have a useful life of five years with a trade-in value of $500. All other equipment has been fully depreciated. The straight-line method is used. As of December 31, three days' wages at $250 per day had accrued. As of December 31, the balance of the supplies account is $4,200. A physical inventory of the supplies was taken, with an amount of $ 1,650 determined to be on hand.Explanation / Answer
**Depreciation per year =( 8000-500)/5 = 7500/ 5 1500.
Current year depreciation = 1500 *8/12 = 1000
Date /No. Account title Debit credit a inventory 928 cost of goods sold (22624-21696] 928 [being inventory account adjusted ] c Insurance expense 1200 Prepaid insurance (2400 *6/12) 1200 [being insurance expired ] d Advertising expense 280 Prepaid advertising (420*2/3) 280 [being advertsing expense recorded e Unearned membership fees 9200 Membership fees earned 9200 [being fees earned recorded] f Depreciation expense 1000** Accumulated depreciation 1000 [depreciation for year recorded ] g Wages expense 750 Wages payable 750 [wages accrued 250*3] h supplies expense 2550 supplies 2550 [being supplies used ] 4200 - 1650Related Questions
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