Question - Craig Ferguson Company has the following balances in selected accounts on December 31, selected data. 2014.
Accounts Receivable $ -0-
Accumulated Depreciation Equipment 10,000
Interest Payable -0-
Notes Payable 20,000
Prepaid Insurance 2,700
Salaries and Wages Payable -0-
Supplies 3,500
Unearned Service Revenue 50,000
All the accounts have normal balances. The information below has been gathered at December 31, 2014.
1. Craig Ferguson Company borrowed $20,000 by signing a 12%, one-year note on August 1, 2014.
2. A count of supplies on December 31, 2014, indicates that supplies of $900 are on hand.
3. Depreciation on the equipment for 2014 is $2,000.
4. Craig Ferguson Company paid $2,700 for 12 months of insurance coverage on May 1, 2014.
5. On November 1, 2014, Craig Ferguson collected $50,000 for consulting services to be performed from November 1, 2014, through March 31, 2015.
6. Craig Ferguson performed consulting services for a client in December 2014. The client will be billed $6,300.
7. Craig Ferguson Company pays its employees total salaries of $13,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2014.
Instructions:
A. Prepare adjusting entries for the seven items described above.
B. Prepare the 2015 entry for items 6 and 7.