Dion Lte is making adjusting entries for the current year ended December 31. In developing information for
Question:
Dion Ltée is making adjusting entries for the current year ended December 31. In developing information for the adjusting entries, the accountant learned the following:
- Dion renewed its one-year insurance policy and paid $4,020 on October 1, of the current year for a one-year insurance policy with coverage beginning on that date. The company paid $3,960 on October 1 of the previous year for the same insurance coverage.
- At December 31 of the current year, the following data relating to shipping supplies were obtained from the records and supporting documents.
Shipping supplies on hand, January 1 of current year | $ | 15,700 |
Purchases of shipping supplies during the current year | 75,400 | |
Shipping supplies on hand, counted on December 31 of the current year | 12,700 | |
Required:
1. Prepare the adjusting entry for insurance at December 31 of the current year, assuming that the bookkeeper debited the full amount paid on October 1 of the current year to prepaid insurance. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3. What amount should be reported for insurance expense and shipping supplies expense, on the statement of earnings for the current year? (Do not round intermediate calculations.)
4. What amount should be reported for prepaid insurance and shipping supplies inventory on the statement of financial position at December 31 of the current year? (Do not round intermediate calculations.)
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M