ACCT 201 Case Fall 2017 Page 7 Question 7 Using the following data, prepare the

Question

ACCT 201 Case Fall 2017 Page 7 Question 7 Using the following data, prepare the adjusting entries for the month ended February 28, 2017 a. Insurance expired during February, $1,700 b. Supplies on February 1 were $1,600 with $7400 of supplies purchased d February. A count of supplies on February 28 indicated $2,100 on hand c. Fees earned but not yet billed $3,600 d. Depreciation on equipment for February $3,500 e. Employees are paid $4,200 every Friday for the five day work week Monday- Friday February 28 is a Tuesday Date Account Titles Ref Debit Credit 0

Explanation / Answer

Assumptions-

1) It is assumed that 1700 belongs to the month of Feb and the entire sum of insurance has been paid in advance.

2) Cost of Supplies = Opening stock + Purchases made during the month - Closing Stock

3) Depreciation, Salary and Fees Income is going to be finally transfered to Profit and Loss Account.

S No. Particulars Debit Credit 1) Insurance 1700 Prepaid Insurance 1700 2) Supplies 6900 Cash 6900 3) Fee Receivable 3600 Profit and Loss 3600 4) Depreciation 3500 Equipment 3500 5) Salary 1680 Salary Payable 1680

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