51) Prepare adjusting entries dated December 31, 2013, based on the following data.

a.A two-year insurance policy costing $3,000 was purchased on October 31, 2013.

b.Salaries owed to employees on December 31, 2013, amount to $2,300.

c.The balance in Supplies before adjustment is $1,400. A physical count reveals $450 of supplies on hand on December 31, 2013.

d.Depreciation on office equipment for the year is $1,869.

e.Unearned Service Revenue has a balance of $4,200 before adjustment. Records show that $2,725 of that amount has been earned by December 31, 2013.

52) Given the following adjustment data, state whether the resulting adjustment will be a deferral or an accrual.

a.Supplies were used during the month.

b.Estimated the monthly utilities bill and recorded the expense.

c.Unearned service revenue had been earned by the end of the month.

d.Recorded the monthly depreciation on the office equipment.

e.Recorded salaries owed to employees at the end of the month but not paid until early next month.

f.Recorded interest earned on a note receivable but not yet collected.

53) Explain the concept of unearned revenue using your student tuition fees. How does your academic institution account for the payment of tuition in its financial statements?

54) Explain the concept of accrued expenses using a Le Chateau store as an example.

55) Prepare the necessary adjusting entries on December 31, 2013, based on the following unadjusted and adjusted trial balances.

Peanut Butter & Jam Inc.

Unadjusted Trial Balance

December 31, 2013

DebitCredit

Cash$25,500

Accounts receivable15,000

Supplies4,500

Prepaid insurance5,000

Equipment89,000

Accumulated depreciation-equipment$6,000

Accounts payable1,800

Unearned service revenue3,700

Common shares93,200

Retained earnings21,000

Service revenue30,700

Utilities expense5,800

Salary expense 9,900

Advertising expense 1,700________

$156,400$156,400

Peanut Butter & Jam Inc.

Adjusted Trial Balance

December 31, 2013

DebitCredit

Cash$25,500

Accounts receivable15,000

Supplies3,000

Prepaid insurance4,200

Equipment89,000

Accumulated depreciation-equipment$6,600

Accounts payable1,800

Salary payable1,200

Unearned service revenue2,500

Common shares93,200

Retained earnings21,000

Service revenue31,900

Utilities expense5,800

Supplies expense1,500

Salary expense11,100

Insurance expense800

Depreciation expense-equipment600

Advertising expense 1,700________

$158,200$158,200

Answer rating: 100% (QA)

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