Fung Cleaning Services (FCS) is making adjusting entries for the year ended September 30, 2013. The accounting clerk gathered the following information:
a. Paid one-year insurance premium of $1,800 on January 21, 2013, for coverage beginning on February 1, 2013.
b. Cleaning Supplies account showed a balance of $520 and $430 on September 30, 2012 and 2013, respectively. During the year, FCS purchased $780 of cleaning supplies.
c. Received $3,600 from a restaurant customer who paid for a six-month cleaning service contract starting on July 1. Cleaning Services Revenue account was credited on July 1.
d. An employee borrowed $9,000 by signing a one-year, 4% interest-bearing note from FCS on September 1. The note specified that interest was payable on the 5th of each month, starting October 2013.
e. Signed a contract on July 1 with a local advertising company for $1,750 monthly advertising fee. The advertising service started immediately after signing the contract, and the payment was to be made on the 2nd of each month, starting August 2013.
Requirements
1. Prepare the adjusting entry for each item (a) to (e).
2. What amount should be reported for revenue and expense accounts, from (a) to (e) on the income statement, for the year ended September 30, 2013?
3. What amount should be reported for each asset and liability account on the statement of financial position?