The current assets and quick assets of a company have The current assets and qui

Question

The current assets and quick assets of a company have The current assets and quick assets of a company have The current assets and quick assets of a company have The current assets and quick assets of a company have n net income C $200 difference between the debit and credit columns of the Unadjusted Trial Salance D. $200 of prepaid insurance and credit columns of the Unadjusted Trial Balance E. An error in the financial statements. To Prepare general journal entries to record the following unrelated year-end odiustments. 18points a. b. Estimated depreciation on office equipment for the year $4,000. The Prepaid Insurance account has a $3,680 debit balance before adjustment. An examination of insurance policies shows $950 of insurance expired The Prepaid Insurance account has a $2,400 debit balance before adjustment. An examination of insurance policies shows $600 of unexpired insurance. The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26, and have worked full days on Monday, Tuesday, and Wednesday, December 29, 30, and 31 On November 1, the company received 6 months' rent in advance from a tenant whose rent is $700 per month. The $4,200 was credited to the Unearned Rent account. The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has not paid his rent for December c. d. e. 3/ 6

Explanation / Answer

General Journal

Date

Accounts Title & Explanation

Debit

Credit

(a).

Depreciation expense – Office Equipment

$4000

    Accumulated Depreciation – Office equipment

$4000

(For recording amount of depreciation expense on office euipment)

(b).

Insurance expense

$950

    Prepaid Insurance Expense

$950

(For recording expired insurance expense)

(c).

Insurance expense

$1800

    Prepaid Insurance Expense

$1800

(For recording expired insurance expense)

(d).

Salary expense

$300

    Salary payable

$300

(For recording 3 days salary payable that is untill unpaid)

(e).

Unearned Rent Account

$1400

    Rent Revenue

$1400

(For recording actual rent revenue of November and December)

(f).

Accrued Rent Income

$750

    Rent income

$750

(For recording rent income which is not yet received.)

Current assets and Quick assets;

As we know that current assets are those assets which can be collected within one year. And quick assets are those assets which are more liquid, in other words we can say that if we exclude inventory and prepaid expenses from current assets then we will get quick assets.

So current assets will be (Actual rent received + Acrued rent income + Prepaid expenses)

Quick assets will be (Actual rent received + Acrued rent income).

General Journal

Date

Accounts Title & Explanation

Debit

Credit

(a).

Depreciation expense – Office Equipment

$4000

    Accumulated Depreciation – Office equipment

$4000

(For recording amount of depreciation expense on office euipment)

(b).

Insurance expense

$950

    Prepaid Insurance Expense

$950

(For recording expired insurance expense)

(c).

Insurance expense

$1800

    Prepaid Insurance Expense

$1800

(For recording expired insurance expense)

(d).

Salary expense

$300

    Salary payable

$300

(For recording 3 days salary payable that is untill unpaid)

(e).

Unearned Rent Account

$1400

    Rent Revenue

$1400

(For recording actual rent revenue of November and December)

(f).

Accrued Rent Income

$750

    Rent income

$750

(For recording rent income which is not yet received.)

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