1. Events concerning the Ellen Company for 2015 are described below:

a. On September 1, 2015, a two-year comprehensive insurance policy was purchased for $2,400. The payment was debited to Prepaid Insurance.

b. On December 1, 2015, a customer paid $1,250 in advance for services to be performed in January of 2016. The payment was credited to Unearned Revenue)

c. On January 1, 2015, the office supplies account had a $500 balance. Supplies 0 costing $3.100 were purchased during the year. At December 31. an inventory count showed $100 of supplies on hand.

4. On December 31, 2015. $4,800 of unpaid employee salaries had accumulated. No entry for these salaries has been recorded.

e. Straight-line depreciation is recorded only at year-end and is being used for a building that was purchased at the beginning o12014 for 548.000. with an expected file 0t30 years and an estimated residual value of $3.000.

f. The Income tax rate Is 35% on current income. Pretax Income before the above adjusting entries was $95,600.

Required:

Prepare the appropriate December 31, 2015 adjusting entry for each item, or Indicate that an adjusting entry is not necessary. Assume that Elien’s transaction s were initially recorded in permanent (balance sheet) accounts unless otherwise indicated.

Answer rating: 100% (QA)

a Insurance expense 400 2400244 Prepaid insurance 400 b No ent... View the full answer