Adjusting Entries
Response to the following :
Consider the following information related to the Timmy Thompson Company:
1. At the beginning of the year, the company had $460 in supplies on hand. During the year, the company purchased $5,300 in supplies. At the end of the year, the company had $1,320 in supplies on hand.
2. The company pays its employees on the 15th of each month. The monthly payroll (ignoring payroll taxes) is $19,000.
3. On November 1, the company received a $10,000 check for services. The transaction was recorded as unearned revenue. By year-end, the Timmy Thompson Company had completed one-fourth of the required work related to this service. Timmy expects to complete the rest of the work within the first two months of the next year.
4. On December 15, Timmy paid $4,800 for factory rental related to January of the next year.
For each item listed, prepare the necessary adjusting entries to be made on December 31.