Identification of items in need of adjustment is not automatic. It requires careful monitoring of the business
Question:
Identification of items in need of adjustment is not automatic. It requires careful monitoring of the business environment, and can entail assessment of information found on various source documents within the business organization. This problem introduces typical “business papers” that document transactions of the W. Brian Voss Company. You are to examine the provided information, and determine what related adjusting entry is needed for each item on December 31, 20X1.
(a) Following is a deposit ticket. This item is usually prepared to accompany money that is taken to a bank for deposit to the company’s bank account. The W. Brian Voss Company provides security services, and the following deposit was from a customer that fully prepaid a 6-month contract commencing on the date of the deposit. The proceeds were initially entered into Voss’s Unearned Revenue account.
(b) The W. Brian Voss Company wrote these checks to purchase supplies during 20X1. Voss began the year with \($1\),297 of supplies on hand. At year’s end, only \($560\) of supplies remained. Each of these transactions was initially recorded in the Supplies account, and no adjusting entries were made during the year.
(c) TheW.Brian Voss Company purchased a new computer. The company estimates that the computer will last four years, and have no salvage value at the end of the four-year period. Following is the invoice that was received at the time the computer was purchased.
(d) The W. Brian Voss Company received the following electric utility bill. It has not been recorded into the accounts.
(e) W.Brian Voss leases office space from Trammell Raven Property Management Company. The leasing market was very soft at that time the lease agreement was struck, and the lease includes terms that are very favorable to Voss. Below is the lease agreement. No entry has been recorded for this lease.
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