Question

Refer to E4– 7.
a. Wages earned by employees during December 2014, unpaid and unrecorded at December 31, 2014, amounted to $ 2,700. The last payroll was December 28; the next payroll will be January 11, 2015.
b. Office supplies inventory at January 1, 2014, was $ 450. Office supplies purchased and debited to office supplies inventory during the year amounted to $ 500. The year- end count showed $ 275 of supplies on hand.
c. One- fourth of the basement space is rented to Heald’s Specialty Shop for $ 560 per month, payable monthly. On December 31, 2014, the rent for November and December 2014 had not been collected or recorded. Collection is expected January 10, 2015.
d. The store used delivery equipment that cost $ 60,500; the estimated depreciation for 2014 was $ 12,100.
e. On July 1, 2014, a two- year insurance premium amounting to $ 2,400 was paid in cash and debited in full to prepaid insurance. Coverage began on July 1, 2014.
f. The remaining basement space of the store is rented for $ 1,600 per month to another merchant, M. Carlos Inc. Carlos sells compatible, but not competitive, merchandise. On November 1, 2014, the store collected six months’ rent in the amount of $ 9,600 in advance from Carlos; it was credited in full to deferred rent revenue when collected.
g. Divtek’s Variety Store operates a repair shop to meet its own needs. The shop also does repairs for M. Carlos. At the end of December 31, 2014, Carlos had not paid $ 800 for completed repairs. This amount has not yet been recorded as repair shop revenue. Collection is expected during January 2015.
Required:
For each of the transactions in E4– 7, indicate the amount and direction of the effects of the adjusting entry on the elements of the statement of financial position and statement of earnings. Use the following format: + for increase, – for decrease, and “N” for no effect.


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  • CreatedAugust 04, 2015
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