Alex Vera organized Succulent Express at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions:

1. Terry Mason invested $50,000 in Succulent Express in exchange for common stock.
2. Paid $4,800 on February 1 for an insurance premium on a one-year policy.
3. Purchased supplies on account, $1,500.
4. Received fees of $62,000 during February.
5. Paid expenses as follows: wages, $22,100; rent, $5,200; utilities, $2,600; and miscellaneous, $3,100.
6. Paid dividends of $4,000.

The transactions above have already been recorded in the integrated financial statement framework below.

Record the adjusting entries at the end of February to record the insurance expense and supplies expense. There were $200 of supplies on hand as of February 28. Identify the adjusting entry for insurance as (a1) and supplies as (a2). Use the integrated financial statement framework below. After each transaction, enter a balance for each item. If an amount box does not require an entry, leave it blank. Enter account decreases as negative amounts using the minus sign.

Balance Sheet

Line Item Description		Assets Cash	+	Assets Supplies	+	Assets Prepaid Insurance	=	Liabilities Accounts Payable	+	Stockholders' Equity Common Stock	+	Stockholders' Equity Retained Earnings
a.	Investment	50,000								50,000
b.	Paid insurance	(4,800)				4,800
	Balances	45,200				4,800				50,000
c.	Purchased supplies			1,500				1,500
	Balances	45,200		1,500		4,800		1,500		50,000
d.	Fees earned	62,000										62,000
	Balances	107,200		1,500		4,800		1,500		50,000		62,000
e.	Paid expenses	(33,000)										(33,000)
	Balances	74,200		1,500		4,800		1,500		50,000		29,000
f.	Paid dividends	(4,000)										(4,000)
	Balances	70,200		1,500		4,800		1,500		50,000		25,000
a1.	Fees earnedInsurance expenseInvestmentPaid dividendsPaid expensesPaid insurancePurchased suppliesSupplies expenseInsurance expense	fill in the blank 2		fill in the blank 3		fill in the blank 4		fill in the blank 5		fill in the blank 6		fill in the blank 7
	Balances	fill in the blank 8		fill in the blank 9		fill in the blank 10		fill in the blank 11		fill in the blank 12		fill in the blank 13
a2.	Fees earnedInsurance expenseInvestmentPaid dividendsPaid expensesPaid insurancePurchased suppliesSupplies expenseSupplies expense	fill in the blank 15		fill in the blank 16		fill in the blank 17		fill in the blank 18		fill in the blank 19		fill in the blank 20
	Balances, February 28	fill in the blank 21		fill in the blank 22		fill in the blank 23		fill in the blank 24		fill in the blank 25		fill in the blank 26
Statement of Cash Flows									Income Statement
a.	Financing			$50,000					d.	Fees earned		$62,000
b.	Operating			(4,800)					e.	Wages expense		(22,100)
d.	Operating			62,000					e.	Rent expense		(5,200)
e.	Operating			(33,000)					e.	Utilities expense		(2,600)
f.	Financing			(4,000)					e.	Miscellaneous expense		(3,100)
	Increase in cash			$70,200					a1.	Fees earnedInsurance expensePrepaid insuranceNo effectInsurance expense		fill in the blank 28
									a2.	DividendsSuppliesSupplies expenseNo effectSupplies expense		fill in the blank 30
										Net incomeNet lossNo effectNet income		$fill in the blank 32

Answer rating: 100% (QA)

To record the adjusting entries for insurance and supplies expenses a1 Adjusting en... View the full answer