Each of the following independent events requires a year-end adjusting entry. Sh

Question

Each of the following independent events requires a year-end adjusting entry. Show how each event and its related adjusting entry affect the accounting equation. Assume a December 31 closing date. The first event is recorded as an example. a. Paid 96.800 cash in advance on April 1 for a one-year insurance policy. b. Purchased $2,000 of supplies on account. At year's end. $180 of supplies remained on hand. c. Paid $5,400 cash in advance on March 1 for a one-year lease on office space. d. Receded an $14,220 cash advance for a contract to provide services in the future. The contract required a one-year commitment starting September 1.

Explanation / Answer

The Accounting Equation

Event/ Adjustment Total Assets = Liabilities + Stockholder's Equity Cash + Other Assets Common Stock + Retained Earnings a (6800.00) + 6800.00 = + + a. Adj. + (5100.00) = + + (5100.00) b + 2000.00 = 2000.00 + + b. Adj. + (1920.00) = + + (1920.00) c (5400.00) + 5400.00 = + + c. Adj. + (4500.00) = + + (4500.00) d 14220.00 + = 14220.00 + + d. Adj. + = (4740.00) + + 4740.00

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.