For each of the following situations, prepare the adjusting entry for the month ended July 3 l and indicate the effect each adjustment would have an net income:
A. Delgado, Inc., purchased a three-year insurance policy on January 2 for $6,000. Delgado prepares quarterly financial statements.
B. On July 1, Rottman Company had a $390 balance in its supplies account. During July, $1,450 of additional supplies were purchased. An inventory at July 31 showed $275 of supplies still on the shelves.
C. Last year, Apple Enterprises purchased some equipment at a total cost of $75,000. The estimated useful life of the equipment is five years. Apple prepares semiannual financial statements.