Response to the following questions:
Q. 1: Scorpio Travel adjusts its books each month and closes its books on December 31 each year.The trial balance at January 31, 2017, before adjustments, follows:
Debit Credit
Cash............................................................................... $3,300
Supplies......................................................................... 2,700
Unexpired Insurance...................................................... 6,300
Equipment..................................................................... 36,000
Accumulated Depreciation: Equipment........................... $9,000
Unearned Admission Revenue....................................... 6,000
Capital Stock................................................................... 7,500
Retained Earnings, January 1, 2017.................................. 21,600
Admissions Revenue...................................................... 13,800
Salaries Expense............................................................. 4,050
Utilities Expense............................................................. 2,850
Rent Expense................................................................. 2,700 ________
$57,900 $57,900
1. Refer to the above data. According to attendance records, $4,800 of the Unearned Admission Revenue has been earned in January.Compute the balance in the following accounts after the proper adjustment is made.
Unearned Admission Revenue account balance
Admission Revenue account balance
1. Refer to the above data.At January 31, the amount of supplies still on hand was determined to be $675.What amount should be reported in the January income statement for supplies expense?
2. Refer to the above data.The equipment has an original useful life of eight years.Compute the bookvalue of the equipment at January 31 after the proper January adjustment is recorded.
3. Refer to the above data.$900 is owed to employees for work since the last payday in January, to be paid the first week of February.What is the effect on January net income if the accountant fails to make any January 31 adjustment for this item?
4. Refer to the above data.On June 1, 2016, the park purchased a 12-month insurance policy.Give the adjusting entry to record insurance coverage expiring in January.(Hint: The company adjusts its books on a monthly basis.)
Q. 2: The accountant for Rose's Emporium, Inc. prepared the following trial balance at January 31, 2018, after one month of operations:
Debit Credit
Cash................................................................................................. $5,700
Accounts Receivable......................................................................... 4,500
Unexpired Insurance........................................................................ 2,100
Office Equipment............................................................................. 18,000
Unearned Consulting Fees................................................................ $3,300
Capital Stock..................................................................................... 15,600
Retained Earnings, January 1, 2018.................................................... 0
Dividends......................................................................................... 3,300
Consulting Fees Earned.................................................................... 26,800
Salaries Expense............................................................................... 7,700
Utilities Expense............................................................................... 1,700
Rent Expense................................................................................... 2,100
Supplies Expense............................................................................. ___600 ______
$45,700 $45,700
Additional information items:
a Consulting services rendered to a client in January, not yet billed or recorded, $2,400.
b Portion of insurance expiring in January, $300.
c Income taxes expense for January of $2,500.
d The office equipment has a life of 5 years.
Instructions.Prepare adjusting entries for a through d.